The Marcos administration's borrowings fell by nearly a quarter in July driven by lower financing in the domestic market.
Gross borrowing of the government in during the month amounted to P131.94 billion, a 24 percent decrease from the previous year.
The government reduced local financing by 34 percent, reaching P110.5 billion in July. Out of the total, P108.4 billion came from the sale of long-term debt papers, while P2.12 billion was acquired through short-term IOU offerings.
Foreign borrowing in July increased threefold, but it was still overshadowed by domestic loans.
The government borrowed P21.44 billion from foreign banks, a 200 percent increase compared to the previous year.
Offshore borrowing was solely from development partners and allocated for infrastructure projects.
From January to July 2023, the national government's gross borrowings reached P1.554 trillion, a 25 percent increase from the same period last year.
Gov't borrowings from foreign, local banks hit P132 B in July
At a glance
The Marcos administration's July borrowings dropped by almost a quarter, mainly due to a reduction in loans acquired from local creditors.
According to the Bureau of the Treasury, government borrowing in July amounted to P131.94 billion, a 24 percent decrease from the P174.95 billion recorded in the same month last year.
The primary reason for the decline is the reduction in borrowings from the domestic market.
In July 2022, local financing stood at P167.81 billion. However, the government managed to reduce the amount by 34 percent to P110.5 billion this year.
Out of the total, P108.4 billion came from the sale of long-term debt papers, while P2.12 billion was acquired through short-term IOU offerings.
Meanwhile, foreign borrowing saw a threefold increase in July. However, it was still insufficient to surpass the amount of the government's domestic loans.
Based on the treasury report, the government borrowed P21.44 billion from foreign banks, a 200 percent increase compared to P7.14 billion in July of the previous year.
The treasury data revealed that the government's offshore borrowing was exclusively obtained from its development partners to finance the construction of infrastructure projects.
Gross borrowing refers to the total amount of money that the government takes as loans or borrows from local and foreign sources to meet its required expenses and address budget deficits.
The national government's gross borrowings for the period of January to July 2023 reached P1.554 trillion, a 25 percent increase compared to the P1.245 trillion borrowed in the same period last year.
National Treasurer Rosalia V. De Leon earlier said the government relies on borrowed funds because its expenses exceed the amount of money it collects in revenue.
This scenario led to a budget deficit that needs to be covered through borrowing.
However, not all the money the government borrows is used to bridge its budget deficit. Some of it goes towards repaying previous loans and the interest on those loans.
In July, the budget deficit amounted to P47.8 billion, lower by 45 percent compared to P86.8 billion in the same month last year.
In 2024, the government plans to borrow over P2.46 trillion to fund portions of the proposed P5.768 trillion national budget of President Marcos.