Gov’t to borrow less in 2016
The government plans to borrow less next year and slash the debt stock to a record low of 41.8 percent of the gross domestic product (GDP), according to documents on the proposed 2016 national budget submitted to Congress on Tuesday.
“Because of our fiscal consolidation efforts, we will need to borrow only P674.8 billion to finance the projected P308.7-billion deficit, amortize P347.7 billion of our maturing outstanding debt, while maintaining sufficient available cash,” the President’s budget message for fiscal year 2016 read.
In the meantime, the Bureau of the Treasury reported on Tuesday that the government’s outstanding debt rose by 1.1 percent month-on-month to P5.816 trillion at the end of the first half.
The end-June domestic debt stood at P3.839 trillion, up 0.5 percent from a month ago. External debt, meanwhile, rose by 2.2 percent to P1.977 trillion.
Under the proposed 2016 Budget of Expenditures and Sources of Financing, next year’s gross borrowings were programmed to be lower than the P710.8 billion programmed for this year.
In 2016, domestic borrowing would account for the bulk or 84.5 percent of the total. The government would source P570.2 billion from the auction of treasury bills and bonds next year.
The government also intends to borrow P104.6 billion from foreign sources, of which P54.1 billion would be program loans, P17.1 billion in project loans, and P33.4 billion in the form of bonds and other inflows.
The lower amount of borrowings next year would further bring down the share of outstanding debt to GDP from the projected 44.7 percent this year.
A decade ago, the debt stock was at a high of 68.5 percent. It has remained to below 50 percent of GDP since 2013.
“If the succeeding administration sustains our commitment to fiscal consolidation, it can further reduce the debt stock to below 40 percent of GDP by its second year in office,” the 2016 budget message said.
This year, the borrowing program is 75-percent domestic (P532.7 billion) and 25-percent foreign (P178.1 billion).
