Gov’t borrowings jump 34% to billion in September

Government borrowing increased by nearly two-fifths in the first nine-months of the year after both local and offshore financing jumped during the period.

Data from the Bureau of the Treasury showed that total borrowings of the national government rose by 34 percent in January to September this year to R623.78 billion from R465.03 billion in the same period last year.

Of the total financing, local sources secured R463.64 billion, higher by 42 percent compared with R325.81 billion a year before. Foreign borrowing, on the other hand, increased 15 percent to R160.13 billion at end-September from R139.23 billion.

In the first three-quarters, projects and program loans from multilateral institutions amounted to R25.45 billion and R35.1 billion billion, respectively. The government also sold R41.58 billion worth of global bonds in February.

In September alone, the government borrowed R42.5 billion, down by 58 percent from R102.36 billion. Of that amount, domestic financing declined to R37 billion, while foreign borrowing increased to R5.5 billion.

The national government needs financing support from local and foreign banks to fund the Duterte administration’s projects and programs as well as bridge the expected budget deficit this year equivalent to 3.0 percent of the country’s gross domestic product (GDP).

For 2017, the national government is poised to borrow lower than last year at R727.64 billion, according to the Department of Budget and Management (DBM) data.

For next year, state borrowing is expected to increase by over a fifth next year while those sourced from abroad are expected to decline as the Duterte administration keeps its bias for domestic creditors.

Data from the Treasury showed the Duterte administration plans to borrow R889.72 billion next year, or 22.3 percent more compared with this year’s R727.64-billion revised ceiling.

The government originally programmed a R631.3-billion financing cap in 2017. However, the inter-agency Development Budget Coordination Committee (DBCC) revised the plan after utilization rate reached above three-fifths in the first four-months alone.

Based on the 2018 financing program approved by the economic managers, about 80 percent of government’s borrowings will be raised from the domestic market amounting to R711.77 billion, 31 percent higher than this year’s R540.14 billion.

The government also intends to borrow a fifth, or R177.94 billion, of its financing requirements from foreign sources, but it is lower by five percent compared with R187.5-billion ceiling set for this year.