Gov’t bor­row­ings jump 34% to bil­lion in Septem­ber

Manila Bulletin - - Business News - By CHINO S. LEYCO

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.

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