Gov’t borrowings hit P2.56 trillion

THE National Government (NG) borrowed P2.56 trillion from local and foreign sources in the first nine months of 2020, data from the Bureau of the Treasury (BTr) showed.

The government’s gross borrowings in the nine-month period surged by 179% from the P917.282 billion recorded a year ago.

In September, borrowings reached P90.6 billion, more than five times the P15.46 billion logged in the same month in 2019. Domestic debt accounted for 55% of the total.

Gross domestic borrowings stood at P50.02 billion in September, versus the P14.45 billion in net redemptions made the year prior. The Treasury issued P45 billion worth of Treasury bonds (T-bonds) and P5.02 billion of Treasury bills (T-bills) through its regular auctions in September.

Excluding the P300-billion debt paid that month, domestic borrowings resulted in net redemption — or when more debts were repaid than new debts obtained — worth P249.98 billion.

Foreign debt reached P40.575 billion in September, up 162% (15.46) from a year ago. This included P38.35 billion worth of program loans and P2.22 billion in project loans.

Less the payments made worth P6.142 billion that month, net external borrowings totaled P34.43 billion.

Year to date, gross borrowings made up 85% of the government’s plan to raise P3 trillion for the entire year. Around 78% were from local creditors and the rest from foreign lenders.

Domestic debt hit P2 trillion, up 219% from a year ago.

Funds raised through retail Treasury bonds (RTBs) accounted for the bulk at P827.12 billion, after the BTr offered the debt papers twice this year, in February and August.

T-bonds issued so far amounted to P492.9 billion, while the net issuance of T-bills hit P390.3 billion.

The government also settled an outstanding P300-billion debt with the central bank at the end of September. After it was settled, the Bangko Sentral ng Pilipinas (BSP) approved another P540 billion in direct provisional advances to the government.

Meanwhile, gross external debt jumped 89% to P550.3 billion, with P344.9 billion in program loans, P19 billion in project loans, and the issuance of global bonds through dollar-denominated notes (P118.7 billion) and euro bonds (P67 billion).

Excluding all the repayments made, net borrowings hit P2.048 trillion as of end-September, up 157% year on year.

The budget deficit narrowed to P351 billion in September, but the nine-month shortfall was still up 194% to P879 billion from a year ago on the back of falling revenues and rising pandemic expenses.

The government runs a budget deficit as it spends more than the revenue it generates. It borrows to fill in the budget gap expected to hit 9.6% of gross domestic product this year. — Beatrice M. Laforga