Marcos gov’t capped ’23 with fatter borrowings

Bureau of the Treasury

Gross borrowings by the Marcos administration rose by 1.37 percent in 2023 after the government continued to incur debts to plug its budget hole and meet the economy’s postpandemic needs.

Latest data from the Bureau of the Treasury (BTr) showed gross financing of the government amounted to P2.19 trillion last year, higher than the 2022 level of P2.16 trillion.

In December 2023 alone, total borrowings amounted to P104.47 billion, up by 76 percent year-on-year.

Figures from the Treasury showed gross local financing in 2023 dipped by 0.55 percent to P1.63 trillion. Of that amount, net proceeds from the weekly sale of Treasury bills amounted to P119.53 billion while those from regular offers of Treasury bonds reached P1.18 trillion.

The figure likewise included the P252.09 billion that the government borrowed from small investors, as well as the P71.78 billion it raised via sale of retail onshore dollar bonds.

The Marcos administration also made its maiden offer of “tokenized” bonds last year, which added P15 billion to the state’s domestic financing.

Meanwhile, gross external liabilities went up 7.49 percent to P559.04 billion in 2023. That amount included project loans worth P135.86 billion and program loans amounting to P204.28 billion.

The government tapped the international credit market last year and raised P163.61 billion through the sale of global bonds, and P55.29 billion via its first issuance of sukuk bonds.

Budget deficit

The Marcos administration plans to borrow a total of P2.46 trillion from creditors at home and abroad in 2024 to help bridge its budget deficit, which is projected to hit P1.4 trillion this year.

Finance Secretary Ralph Recto said the government would remain “prudent” in its debt management by continuing to adopt a 75:25 borrowing mix in favor of domestic sources. That means that the borrowing program this year will be composed of local debts worth P1.85 trillion and foreign financing amounting to P606.85 billion.

Such a strategy, Recto explained, would “mitigate foreign exchange risks, take advantage of the abundant liquidity in the country’s financial system, and support the development of the local debt and capital markets.”

To diversify the state’s funding sources, Recto said the BTr was looking at various global bond markets, with a “potential curtain-raiser offering” in the first semester of the year. INQ