Gross borrowings decline in 5 months

The national government’s borrowings in the first five months continued to decline due to less issuances of onshore government securities, according the Bureau of the Treasury (BTr).

Based on the latest data from the agency, gross borrowings as of end-May declined 33.18 percent to P302.58 billion, as compared to the P452.81 billion in the same period last year.

This was despite the 74.55 percent jump

in gross borrowings for May, which reached P57.97 billion.

Of the total borrowings as of May 31, the BTr said P150.45 billion came from domestic lenders. This was 52.63 percent lower than the P317.58 billion in the same period in 2017.

The bulk, or P104.96 billion of this amount, came in the form of fixed-rate Treasury bonds, declining 13 percent from the P120.79 billion issued a year ago. This happened as the Treasury went for more rejection and partial awards on T-bond auctions during the period.

The remaining P45.49 billion in domestic borrowings as of end-May also came from the bidding of Treasury-bills.

Meanwhile, data from the BTr also showed that the national government borrowed P152.13 billion from foreign creditors from January to May. This was 12.5 percent higher than last year’s level of P135.22 billion.

Of the amount, P102.68 billion was raised through the issuance of global bonds, while another P12.01 billion was through the sale of panda bonds or renminbi denominated securities. Last January, the government successfully sold $2 billion worth of 10-year global bonds at a coupon rate of 3.3 percent. About 1.46 billion renminbi ($230 million) in new money was also raised from the sale of three year panda bonds last March.

Other sources of external debt include program loans (P21.44 billion) and project loans (P15.99 billion) from multilateral agencies, such as the World Bank, Asian Development Bank, and Japan International Cooperation Agency.

The government borrows from local and foreign creditors to pay maturing debt and finance its budget deficit, which is targeted at three percent of the country’s gross domestic product (GDP).

For the whole of 2018, the national government is programmed to borrow P889.51 billion from local and foreign lenders. Of this amount, P176.26 billion will come from foreign financing, while the remaining P711.8 billion will be borrowed domestically.

As of end-May, the national government’s outstanding debt reached P6.83, slightly lower than the end-April level of P6.87 trillion.