DOWN. Government borrowings in the first semester decreased by 26 percent compared with last year’s. The finance department says that even a rising debt is tolerable as long as its percentage to GDP is shrinking.
(Editor’s note: We are reposting this story, which was originally titled “First-half borrowings of gov’t jump to P300B,” to correct some erroneous figures and misstatements.)
Government borrowings in the first half of the year dropped by 26 percent to about P300 billion in the first half of the year from a year ago.
Data from the Department of Finance (DoF) showed that in January to June this year, the government borrowed a total of P297.58 billion, down from P400.955 billion in the first half of 2010.
The government borrowed both from domestic and foreign creditors. The bulk of the borrowings, P274.27 billion, or 92 percent of the total, was used to pay maturing obligations, while the rest went to operating expenses that could not be covered by government revenue collection.
The debts paid by the government were composed of P85.37 billion owed to foreign creditors and investors, while the larger portion of P188.9 billion represented its obligations to domestic lenders.
Foreign creditors include development institutions such as the World Bank, Asian Development Bank and Japan Bank for International Cooperation. Foreign investors are those who bought sovereign bonds sold by the government in the international capital market.
Domestic investors were those who purchased treasury bills and T-bonds that were auctioned off by the Bureau of the Treasury.
The continued reliance of the government on borrowings resulted in the continued rise in outstanding obligations, estimated at P4.7 trillion, or about 55 percent of the country’s gross domestic product.
The finance department said that even a rising debt is tolerable as long as its percentage to GDP is shrinking. It said the 55-percent debt-to-GDP ratio was a significant improvement from the more than 70 percent recorded over a decade ago.
The DoF said programs had been put in place to shore up tax collection. These include intensified tax audits and more aggressive filing of cases against tax evaders.