National gov’t cut pace of borrowing in last 10 months

The national government’s financing position fell by 25 percent in the 10 months ending Oct. 31, with net inflows totaling just P1.85 trillion this year compared to P2.47 trillion in the same period last year.

This came as the monthly readout for October beefed up the running tally by P176.6 billion, mainly on account of borrowing P116.9 billion through the issuance of US dollar-denominated bonds as well as P108.1 billion in Treasury bonds (T-bonds).

Local borrowings were partly offset as the government’s payout of maturing Treasury bills exceeded the proceeds from new issues by P51.4 billion.

In early October, the government raised a total of $2 billion from the commercial bonds market despite volatile conditions.

The transaction covers $500 million in five-year bonds; $750 million in 10.5-year bonds; and $750 million in 25-year “green” bonds.

The proceeds from the sale of the five- and 10.5-year bonds are intended to be used for general purposes, including budgetary support. Those from the 25-year bonds will be used to finance or refinance assets under the government’s Sustainable Finance Framework.

Data from the Bureau of the Treasury show that from January to October, gross foreign borrowings rang up at P471.7 billion, including P72.2 billion in project loans, P136.6 billion in program loans, a total of P234.3 billion in US dollar bonds and P28.6 billion in Japanese yen bonds.

Repaying foreign loans

At the same time, the government paid P87.7 billion of its foreign obligations. This put the net foreign borrowing for the period at P384 billion, which was 30 percent higher than the P294.8 billion recorded in the same period last year.

Further, gross domestic borrowings totaled at P1.58 trillion, including P878.2 billion in retail T-bonds and P1.04 trillion in T-bonds.

From January to October, the government paid out P338.4 billion worth of T-bills more than the amount it issued. This put the net domestic borrowing for the period at P1.47 trillion, which was 33 percent lower than the P2.18 trillion chalked up last year.

In October alone, the government’s net borrowings from foreign lenders was pegged at P125.7 billion, ballooning by more than 17 times from P7.2 billion in the same month last year.

Net borrowings from local lenders was pegged at P56.6 billion or 58 percent less than the year-ago P133.5 billion.

This put the government’s financing position in October at a net borrowing of P176.6 billion, jumping by 25 percent from P140.8 billion in the month of 2021.

This year, as of end-October, the national government’s budget deficit was pegged at P1.1 trillion, shrinking by 7.6 percent from P1.2 trillion in the comparative nine months last year. INQ