8-month borrowings of gov’t hit P 2.47T

The government’s gross borrowings from January to August totaled P2.47 trillion—more than the amount it borrowed during the past two years combined —as it contracted more loans to finance the fight against the COVID-19 pandemic.

During the first eight months, domestic borrowings from the sale of treasury bills and bonds reached a gross amount of P1.96 trillion, the latest Bureau of the Treasury data showed.

Foreign borrowings coming from loans extended by multilateral and bilateral lenders as well as offshore bonds issuances raised a gross of P509.69 billion as of end-August.

The eight-month gross borrowings were bigger than the combined P1.91 trillion in the past two years—P897.6 billion in 2018 and P1.02 trillion in 2019.

If 2017 borrowings worth P901.7 billion were included, the previous three years’ total was P2.82 trillion, which the end-August 2020 amount nearly approached.

The first eight months’ locally sourced borrowings included P385.3 billion in net of short-dated treasury bills; P447.9 billion in fixed-rate treasury bonds; P827.1 billion in retail treasury bonds (RTBs), and P300 billion in repurchase agreement with the Bangko Sentral ng Pilipinas.

The Treasury settled a record P516.3 billion in five-year RTBs in August on top of the P310.8 billion it sold last February.

End-August external borrowings, meanwhile, included P306.5 billion in program loans; P17.1 billion in project loans; P118.7 billion in US dollar-denominated global bonds, and P67.3 billion in euro bonds.

Last week, Finance Secretary Carlos Dominguez III said foreign-sourced financing for COVID-19 response, including grants given to the Philippines, amounted to $9.9 billion to date.

Due to the RTB settlement last August, the month posted the biggest gross borrowings so far this year at P612.9 billion (P584.4-billion domestic and P28.5-billion external).

The government had programmed to borrow P3 trillion this year—the bulk or P2.22 trillion from the domestic debt market to mitigate foreign exchange risks, which would nonetheless jack up its outstanding debt to a record-high P10.16 trillion by end-2020.

The debt-to-gross domestic product (GDP) ratio will climb to 53.9 percent in 2020 from a record-low of 39.6 percent in 2019.

Dominguez last week said the government will look for additional revenue sources by end-2021 or early 2022 “to pay for the heavy indebtedness that we are incurring this year.” INQ