The Philippines borrowed a record P2.74 trillion in 2020 to fight the health and socioeconomic crises inflicted by the COVID-19 pandemic.
The latest Bureau of the Treasury data showed that gross domestic borrowings cornered the bulk or 73 percent of last year’s total, amounting to P1.99 trillion—the biggest yearly financing sourced from the sale of treasury bills and bonds to date.
Last year, the amount raised from retail treasury bonds (RTBs) sold to small investors reached P833.6 billion; from fixed-rate bonds, P701.7 billion, and short-dated bills, a net of P463.3 billion.
Gross external financing, meanwhile, amounted to P742.4 billion in 2020, also the highest annual amount borrowed from foreign sources on record.
Program loans from multilateral lenders and bilateral development partners last year reached P375.2 billion on top of P49.1 billion in project loans.
The Philippines also raised P250.8 billion from two issues of US dollar-denominated global bonds plus P67.3 billion in euro bonds.
Prior to the pandemic, the national government borrowed P1.02 trillion in 2019—P693.8 billion locally and P321.9 billion externally.
The 2020 borrowings exceeded the combined financing raised in 2018 and 2019 totaling P1.91 trillion and nearly matched the preceding three years’ total of P2.82 trillion if 2017 borrowings were included.
In the Treasury report, the repayments for short-term debt extended by the Bangko Sentral ng Pilipinas (BSP)—amounting to P300 billion paid in September last year and a bigger P540 billion settled last December—were excluded from the gross domestic borrowings figure.
In January, the BSP again extended a P540-billion cash advance to the national government.
In a Feb. 24 report, the Washington-based Institute of International Finance (IIF) noted that across emerging markets, the Philippines and Indonesia were only among the handful whose central banks provided direct support to fiscal-deficit financing.
Amid a prolonged pandemic-induced recession putting pressure on debt and fiscal sustainability, “deep domestic financial systems can help insulate emerging markets from shocks,” IIIF said. INQ