Gov’t borrowing rises sharply in July amid foreign loan inflows

GOVERNMENT borrowing surged in July amid inflows of foreign funds for new program loans, according to Bureau of the Treasury (BTr) data.

National government loans totaled P44.40 billion, against P14.21 billion a year earlier.

Borrowing from foreign sources was P23.07 billion, against P1.18 billion a year earlier, accounting for 52% of the overall loan portfolio.

During the month, the government received P21.39 billion worth of program loans.

Funds borrowed from domestic sources total P21.32 billion, up from P13.08 billion a year earlier.

All domestic loans in July came in the form of Treasury bond issues. A year earlier the government maintained a net redemption position in bonds.

The government borrows funds to pay for public projects and programs beyond its ability to finance from the budget, amid an aggressive spending program largely focused on infrastructure.

The government hopes to maintain a budget deficit of 3% of gross domestic product, a rule of thumb widely deemed to represent prudent deficitspending levels.

In the seven months to July, overall gross borrowing fell 2.83% from a year earlier to P505.26 billion.

This is equivalent to 56.88% of the P888.23 billion programmed for borrowing this year.

Of the total, P178.90 billion was sourced from foreign lenders, up 27.43% from a year earlier, and accounting for 35.41% of the seven-month loan portfolio.

The government borrowed P326.36 billion from domestic creditors, down 14.02% from a year earlier. —