Gov’t borrowings triple in July due to ODA

National government’s borrowings tripled in July this year owing to higher concessional loans or official development assistance (ODA) from multilateral institutions used to fund the Duterte administration’s 18-trillion infrastructure program.

Data from the Bureau of the Treasury showed that the national government’s total financing during the month accelerated by 210.5 percent to 144.12 billion from 114.21 billion in the same month last year.

In July, foreign borrowings amounted to 123.07 billion, a significant jump compared with only 11.18 billion in the previous year. Of that amount, 121.39 billion was program loans, equivalent to 92.71 percent of the total financing.

The remaining 11.68 billion, meanwhile, represented project loans from multilateral agencies, like the World Bank, Asian Development Bank, among others.

Local borrowings, on the other hand, rose by 61 percent year-on-year to 121.05 billion in July from 113.03 billion a year before, which were all raised through the sale short-dated IOUs or three-, six-, and one-year Treasury bills.

The July actual financing brought the national government’s total borrowings in the first seven months of the year to 1505.25 billion, an increase of 9.3 percent compared with 1462.01 billion in the same period last year.

At end-July, domestic financing declined by 14 percent to 1326.36 billion from 1379.58 billion, while offshore borrowings rose by more than double year-on-year to 1178.9 billion from 182.43 billion.

But despite the rise, the national government’s end-July gross borrowings were still way below its program for the year of 1971.86 billion.

President Rodrigo R. Duterte’s economic team has committed to mobilize up to 18 trillion during their administration to underwrite the government’s ambitious infrastructure buildup program.

The massive infrastructure investment, which the Duterte administration describes as the “golden age of infrastructure,” is expected to bring the country’s economic growth rate to at least 7.0 percent over the medium term.

For 2019, the national government has set for the first time its borrowing program at a trillion level.

National Treasurer Rosalia V. de Leon earlier said that the government was planning to borrow 11.19 trillion next year from the domestic and foreign markets, up by 19 percent compared with 1996 billion this year.

In nominal terms, the government will secure 1891.7 billion from the local debt market, while 1297.2 billion from the overseas financial institutions.

For this reason, the Development Budget Coordination Committee (DBCC) expects the national government’s total debt stock could reach 18.115 trillion next year, or 10 percent more than the 17.331-trillion target for 2018.