Gov’t debt in January-May up 17% to P 1.77T

Government borrowings, mainly from local sources, to finance the budget and the fight against the prolonged pandemic rose by 17 percent year-on-year to P1.77 trillion as of end-May.

The latest Bureau of the Treasury data showed that gross domestic borrowings during the first five months jumped to P1.51 trillion from P1.15 trillion a year ago.

Locally sourced financing raised through the sale of treasury bills and bonds plus the P540-billion short-term loan from the Bangko Sentral ng Pilipinas (BSP) as of May already matched the government’s total borrowings, including foreign obligations, of P1.15 billion in the same period last year.

From January to May, the Treasury raised a net of P120.3 billion through the sale of T-bills, P389 billion from fixed-rate T-bonds, and P463.3 billion from retail treasury bonds (RTBs), which were issued last March.

In the meantime, end-May gross external borrowings declined to P253.04 billion from P356.64 billion a year ago, mainly due to bigger government offshore bond issuances last year.

In the first five months of 2020, the Philippines sold P166 billion in global bonds—P118.7 billion in US dollar-denominated bonds and P67.3 billion in euro bonds. As of May this year, the government’s P146.1-billion commercial fund-raising included P121.9 billion in euro-denominated global bonds plus P24.2 billion in yen-denominated samurai bonds, which were both settled in April.

The Philippines’ end-May external borrowings also included P72.1 billion in program loans and P34.8 billion in project loans released by multilateral lenders and bilateral development partners.

The government had programmed to borrow a record P3.1 trillion this year, of which P2.6 trillion will be sourced locally.

In an economic bulletin on Saturday, Finance Undersecretary and chief economist Gil Beltran said the Philippines’ external debt stock—public and private combined—declined 1.5 percent year-on-year to $97.05 billion in the first quarter.

Last year, the “manageable” 27.2-percent share of external debt to gross domestic product was the lowest in Asean-5, Beltran said.

But Beltran conceded that external debt was recently building up due to “the government’s resource mobilization against the COVID-19 pandemic.”

In March alone, the Philippines secured a total of $1.2 billion in loans from the Manila-based Asian Development Bank, the Beijing-based Asian Infrastructure Investment Bank, and the Washington-based World Bank to finance procurement of COVID-19 vaccines.

Last month, the World Bank extended three loans to the Philippines totaling $980 million to prepare Metro Manila from earthquakes, improve rural farms and fisheries’ productivity, and make the financial sector resilient from shocks. INQ