The latest Bureau of the Treasury (BTr) data showed that external and domestic borrowings from January to March fell 22 percent from P1.38 trillion during the same three-month period last year.
End-March gross borrowings from local creditors, mainly through the issuance of treasury bills and bonds, declined to P849.1 billion from more than P1.3 trillion a year ago.
The lower domestic borrowings also reflected the smaller amount of P300 billion extended by the Bangko Sentral ng Pilipinas (BSP) to the national government this year, compared to the P540 billion in short-term debt in 2021.
To recall, the Department of Finance (DOF) and the BTr had requested lower liquidity support from the central bank amid improving growth prospects as a result of the reopening of more economic sectors, Finance Secretary Carlos Dominguez III had said. This borrowing will be fully repaid to the BSP before President Duterte steps down in mid-2022, according to Dominguez.
During the first three months, a net of P139.5 billion in treasury bills matured, hence reduced the local debt stock, which also included the P457.8 billion in five-year retail treasury bonds (RTBs) issued on March, plus P230.9 billion in fixed-rate, long-dated T-bonds.
But gross foreign borrowings jumped to over P233 billion as of March from only P79.4 billion a year ago, as the Philippines raised P117.3 billion from US dollar-denominated global securities, including its first-ever “green” bonds, in March. In contrast, the Philippines embarked on fund-raising in the offshore commercial market last year only beginning April, through euro bonds.
The DOF and BTr officials had said the government would borrow a total of P2.2 trillion this year, of which three-fourths or P1.65 trillion would be sourced from the domestic debt market. This year’s borrowings will be smaller than the gross financing amounting to P2.58 trillion last year, which was also down from the record P2.74 trillion in 2020, when the government scrambled to beef up its war chest against the health and socioeconomic crises inflicted by COVID-19.