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Gov’t borrowings breach P3-T mark

51.2% debt-to-GDP ratio highest since 2010
By: - Reporter / @bendeveraINQ
/ 04:06 AM December 01, 2020

The Philippines’ borrowings from January to October hit P3.22 trillion, exceeding the P3-trillion full-year program as the national government secured another P540 billion from the Bangko Sentral ng Pilipinas (BSP) last month to bolster its war chest for COVID-19 response.

End-October gross domestic borrowings amounted to a record P2.65 trillion, bloated by the P840 billion in short-term borrowings through the BSP and the Bureau of the Treasury’s repurchase agreement, the latest national government financing data showed.

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After the initial P300 billion borrowed from the BSP at the onset of the pandemic in March was repaid in September, the national government again tapped the central bank for a bigger amount of financing in October.

National Treasurer Rosalia de Leon earlier noted that the repo with the BSP involved rollover debt or extended liabilities.

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The government had programmed short-term borrowings from the BSP at P500 billion this year and P1 trillion next year.

The Treasury also raised funds to be spent on fighting COVID-19 from its auction of short-dated treasury bills, with a net of P420.3 billion as of October; P561.9 billion from fixed-rate treasury bonds and P827.1 billion from retail treasury bonds (RTBs).

Highest in 2010

On top of local fund-raising, the government borrowed a total of P574.4 billion from foreign sources during the first 10 months.

The 10-month external borrowings pile included P364.6 billion in program loans and P23.7 billion in project loans from bilateral development partners and multilateral lenders; P118.7 billion in dollar-denominated global bonds as well as P67.3 billion in euro bonds.

The end-October total borrowings already nearly matched the gross financing obtained by the national government from 2016 to 2019, which totaled P3.32 trillion.

The Philippines’ debt-to-gross domestic product (GDP) ratio reached 51.2 percent as of September, the highest since 2010, as its outstanding obligations jumped 18.5 percent year-on-year to P9.37 trillion while the economy shrank by an average of 10 percent during the first nine months.

Debt-to-GDP had been projected to jump to 53.9 percent by end-2020—poised to be the highest since 2006’s 58.8 percent—from a record-low of 39.6 percent in 2019. INQ

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TAGS: Bangko Sentral ng Pilipinas (BSP), Business, COVID-19
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