Government borrowings hit P1.9T in H1

Published August 9, 2021, 7:00 AM

by Chino S. Leyco

Government borrowings increased in the first-semester of the year amid higher deficit spending due to prolonged pandemic, data from the Bureau of the Treasury revealed.         

Gross financing of the Duterte administration advanced 12 percent to P1.932 trillion in January to June this year from P1.722 trillion in the same period last year.

Bulk of the borrowings were sourced domestically, totaling to P1.647 trillion, an increase of 26 percent compared with P1.309 trillion in the previous year.

Based on the Treasury data, local borrowings were mainly composed of retail, and longer-term debt papers as well as financing from the Bangko Sentral ng Pilipinas (BSP).

At end June, fixed rate Treasury bonds hit P571 billion, while retail Treasury bonds amounted to P463.32 billion. Moreover, P73.6 billion worth of fresh Treasury bills were also issued during the period.

In addition, the government also tapped the central bank for P540 billion of short-term borrowings.

Meanwhile, financing from external sources declined in the first six-months by 31 percent from P413.46 billion to P284.95 billion.

According to the Treasury, project and program loans reached only P43.71 billion and P95.08 billion, respectively.

The national government also sold debt papers to offshore creditors.

The Philippines issued P121.97 billion worth of Euro bonds and P24.19 billion of Samurai bonds both in April.

In June alone, the national government borrowed P167.2 billion, 21 percent lower compared with P213.23 billion in the same month in 2020.

Of that amount, local financing dropped 13 percent from P156.31 billion to P135.29 billion.

Likewise, foreign borrowings decreased 44 percent to P31.91 billion from P56.82 billion.

The increase in borrowings in the first half of the year was driven by the 28 percent rise in the government’s budget deficit.

The Duterte administration incurred a P716.1 billion fiscal gap in January to June, more than a quarter higher compared with P560.4 billion a year before.

However, the end-June fiscal deficit was 30 percent below than the P1.018 trillion programmed for the period.
As of June, the national government’s outstanding debt stock stood at P11.166 trillion, higher by 23 percent from only P9.054 trillion a year earlier.