The government borrowed P532.03 billion in the first ten months of the year—nearly 34 percent lower than the amount of loans it took out during the comparative period of 2012, the Department of Finance (DOF) reported.
In October alone, borrowings dropped year-on-year by 72.8 percent to P54.09 billion, DOF data showed.
In the ten months to October, the government borrowed P501.93 billion from domestic creditors, way more than the P31 billion it secured from abroad.
The significant drop in borrowings came about just as the amount of maturing liabilities declined. The money borrowed by the state mostly had been used to pay off the debts that were about to fall due.
Debt amortization dropped by 38 percent year-on-year to P219.47 billion in the first ten months.
Treasury officials said the decline in maturing obligations was due to the drop in interest rates and measures taken by the government to better manage debt.
Interest rates on the government’s short-term borrowings fell to record lows this year as the rates for Treasury bills dropped to below one percent.
The government borrows more from domestic sources than foreign ones. National Treasurer Rosalia de Leon said the bias toward domestic sources would be maintained because they do not carry foreign exchange risks.
The government has yet to firm up its 2014 borrowing program, although preliminary plans show that it may borrow $2 billion from foreign creditors. Foreign borrowings are expected account for only 13 percent of total borrowings next year, with the bulk of 87 percent intended to be sourced from the domestic market.
Domestic borrowings are made through the weekly auction of treasury bills and bonds by the Bureau of the Treasury.
Foreign borrowings are done through the sale of sovereign bonds in the international capital market and by securing cheap loans, in the form of official development assistance (ODA), from multilateral development institutions.
The biggest sources of ODAs are Asian Development Bank, the World Bank and Japan International Cooperation Agency.