PH gov’t borrowings hit 4-month high in November

THE AMOUNT borrowed by the government last November from local and foreign lenders totaled P33.704 billion, the biggest in four months, latest data from the Bureau of the Treasury showed.

On a year-on-year comparison, it exceeded by 6.9 percent the P31.521 billion borrowed by the government in the same month in 2013.

The 11-month total of P330.721 billion, however, was 41.3-percent lower than the P563.547 billion borrowed in the same period in 2013.

Of the end-November borrowings figure, P235.122 billion or 71.1 percent came from local sources, while the remaining P95.599 billion or 28.9 percent were from foreign sources.

or 2014, the government had programmed a borrowing mix of 83-percent domestic and 17-percent external, as the inter-agency Development Budget Coordination Committee (DBCC) had deemed that more foreign financing was needed last year to fund reconstruction and rehabilitation initiatives in the areas flattened by natural disasters in 2013.

In November alone, external borrowings amounted to P419 million, the lowest so far for 2014. It is also smaller than the P868 million in foreign loans obtained in the same month of the previous year.

In contrast, debt acquired from domestic sources, mainly through the auction of treasury bills and bonds, reached its highest level so far in 2014 in November at P33.285 billion. This was also higher than the previous year’s P30.653 billion.

In November, the bigger share in foreign financing or P236 million was poured in by multilateral lenders as project loans, while P183 million represented loans for specific programs also funded by multilateral agencies as official development assistance or ODA.

As for domestic borrowings, the bulk came from the net of the fixed-rate, long-tenor treasury bonds worth P28.688 billion, while treasury bills sold to investors contributed P4.597 billion.

For this year, the share of programmed domestic borrowings was increased to 86 percent while the external component was cut to 14 percent.
Early this month, the Philippine government tapped offshore borrowings through the sale of $2 billion worth of 25-year Republic of the Philippines or ROP bonds at a record-low coupon of 3.95 percent.

Of the proceeds of this global bond issuance, the larger chunk of $1.5 billion was used to swap and retire old debt paper previously issued at higher rates and maturing between next year and 2034, while $500 million will be infused into the budget.

Budget Secretary Florencio B. Abad had said that the $500 million in new money “will give the national government enough fiscal space to address its budgetary requirements for the coming year.”