Gov’t borrowings rise 202% in first quarter

Published June 2, 2019, 12:00 AM

by manilabulletin_admin

By Chino S. Leyco

The national government borrowed more in the first three months of the year to support the Duterte administration’s infrastructure program as well as bridge the projected budget deficit, data from the Bureau of the Treasury showed.

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Based on the Treasury report, the national government’s total borrowings in the first-quarter jumped by 202 percent to P623.6 billion from P206.18 billion in the same period last year and bulk of which was sourced from the domestic market.

At end-March, local borrowings stood at P490.6 billion, up by 694 percent from P61.78 billion in the previous year, while offshore financing rose by eight percent year-on-year to P132.98 billion from P144.4 billion.

The rise in government borrowings in the quarter ending March is attributable to the increased sale of short- and long-dated IOUs by the treasury bureau.
The government sold P141.5 billion worth of Treasury bonds during the quarter, and another P131.28 billion of Treasury bills.

Likewise, the P78.04 billion proceeds from the sale of global bonds in January and the P48.34-billion conversional loans from multilateral institutions contributed to the increase in overseas borrowings during the period.

In March alone, the national government’s financing activities accelerated by 608 percent to P314.47 billion from only P44.37 billion in the same period last year. Of the total amount, local borrowings reached P298 billion, while overseas financing amounted to P16.47 billion.

The main reason for the higher borrowings during the month was the P235.83-billion sale of retail Treasury bonds in the domestic market.

Last week, the treasury reported that the national government’s outstanding debt stood at P7.786 trillion, up by 13 percent compared with P6.874 trillion in the same period last year. Of the total stock, 66.8 percent was borrowed domestically, while the balance 33.2 percent was sourced from external markets.

Based on the treasury report, debt in the local market jumped 16 percent year-on-year to P5.205 trillion in April from P4.499 trillion a year ago, while offshore obligations rose nine percent from P2.375 trillion to P2.581 trillion.
According to the treasury, the increase in debt was owing to higher borrowing requirement of the national government to bridge its projected budget deficit and revaluation of onshore dollar bonds.

The local currency weakened last April, averaging at 52.098 against the US dollar from 51.734 in the same month last year.

The stronger US dollar also raised the national government’s debt obligation in the overseas markets.