Government cuts borrowings by half in July
TOTAL money borrowed by the national government in July from both local and foreign markets slid by 44.9 percent to P33.4 billion.
Total borrowings last July were lower than the P60.6 billion a year ago.
Gross external borrowings, which are being sourced from multilateral lenders’ programs and project loans, amounted to P5.4 billion in July, down 81.6 percent from P29.6 billion last year.
Gross domestic borrowings, which come from the auction of treasury bonds and bills, reached P27.9 billion last July, down 9.7 percent from almost P31 billion a year ago.
At the end of the first seven months, government borrowings totaled P219.6 billion, 6.4 percent lower than the P234.8 billion recorded in the same period last year.
End-July external borrowings increased by 16.3 percent to P 100.8 billion from P86.7 billion a year ago.
Domestic borrowings as of end-July, meanwhile, decreased by 19.8 percent to P 118.8 billion from P148.1 billion last year.
The borrowing program for this year is 75-percent domestic (P532.7 billion) and 25-percent foreign (P178.1 billion).
Last January, the Philippine government borrowed offshore through the sale of $2-billion worth of 25-year bonds at a record-low coupon of 3.95 percent.
Of the proceeds from 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.
The Department of Finance’s chief economist earlier said the share of debt to the economy slid further amid an expanding gross domestic product (GDP) and decreasing borrowings due to higher revenues,
“A combination of robust revenues, lower deficit and stable interest rates led to the continuing drop in the debt-to-GDP ratio to 44.9 percent in June, from the end-2014 ratio of 45.4 percent,” Finance Undersecretary Gil S. Beltran noted in an economic bulletin issued this month.
“The strong fiscal position shall provide adequate fiscal space to enable the economy to push economic growth to higher levels during the remainder of the year, even with the ongoing global financial volatilities and threats of El Niño phenomenon,” Beltran said.
In 2014, the national government borrowed a total of P369 billion—the lowest amount since 2002’s P275 billion. The gross borrowings last year were also 33.5-percent lower than 2013’s P555 billion.
In 2016, the government plans to borrow P674.8 billion, lower than this year’s program of P710.8 billion, to slash the debt stock—the share of outstanding debt to the gross domestic product—to a record-low of 41.8 percent.
The domestic borrowing next year would compose 85 percent of the total, or P570.2 billion. The government would also borrow P104.6 billion from foreign sources next year—P54.1 billion in program loans, P17.1 billion project loans, and P33.4 billion in bonds and other inflows.
