With the economy recovering and no longer in need of additional financing from the central bank, the national government’s borrowings were nearly halved to P1.07 trillion in the first half of 2022.
Data from the Bureau of the Treasury (BTr) showed gross borrowings from January to June fell 45 percent from P1.93 trillion a year ago.
Domestic borrowings, which accounted for the bulk of government financing, dropped to P741.3 billion from P1.65 trillion previously.
To recall, the Bangko Sentral ng Pilipinas (BSP) in 2021 extended to the national government a zero-interest, short-term loan amounting to P540 billion, which was repaid last December.
In January of this year, the government borrowed a smaller P300 billion from the BSP, which was fully repaid in May, as tax and nontax revenues were expected to exceed prepandemic levels this year with economic reopening in full swing.
The BTr has raised P457.8 billion from five-year retail treasury bonds issued last March, and P535.4 billion from fixed-rate treasury bonds, which were offset by P251.9 billion in maturities of short-dated T-bills during the period in review.
Gross external borrowings in the first six months rose to P329.3 billion from a year ago’s P284.9 billion.
The national government will borrow a total of P2.2 trillion this year, of which P1.65 trillion would be raised through the issuance of T-bills and bonds. The Philippines sources the bulk of its budget financing locally to take advantage of a liquid financial system and to temper foreign exchange risks.