GOVT BREACHES P1.4-T 2020 BORROWING PLAN
IN just five months, the Philippine government has breached its P1.4trillion borrowing program for this year, having taken out P1.509 trillion from both domestic and foreign sources, latest data from the Bureau of the Treasury showed.
Government’s gross borrowings as of end-may also surged by 91.75 percent year-on-year from only P787.13 billion a year ago as
the country needed more funds to fight the Covid-19 pandemic amid a ballooning budget deficit.
Of the total gross borrowings for the five-month period, 76.37 percent was sourced locally while the remaining 23.63 percent came from foreign sources.
Year-on-year, gross domestic borrowings as of end-may doubled to P1.153 trillion from only P576.016 billion in the same period in 2019.
On the other hand, foreign borrowings during the period jumped by 68.93 percent to P356.64 billion from P211.1 billion last year.
Broken down, domestic borrowings so far comprised retail treasury bonds (P310.766 billion), fixed-rate treasury bonds (P307.859 billion), domestic loan under the repurchase agreement with Bangko Sentral ng Pilipinas (P300 billion), and treasury bills (P234.017 billion).
External borrowings
MEANWHILE, external borrowings of the national government include program loans (P162.789 billion), dollar-denominated global bonds (P118.735 billion), euro bonds (P67.329 billion) and project loans (P7.787 billion).
For May alone, gross borrowings more than doubled to P289.817 billion from only P125.607 billion in the same month in 2019.
Domestic borrowings in May this year more than tripled to P170.510 billion from 2019’s P50.908 billion while foreign borrowings rose by 59.72 percent to P119.31 billion from P74.699 billion in May 2019.
The national government’s outstanding debt as of end-may swelled by 12.3 percent to P8.89 trillion from P7.916 trillion in the same period in 2019.
Of the total outstanding debt stock of P8.89 trillion as of endmay, 68 percent was borrowed from local sources, while 32 percent came from foreign sources.
Wider deficit
THE Cabinet-level Development Budget Coordination Committee (DBCC) expects a wider budget deficit this year at 8.4 percent of GDP or equivalent to P1.613 trillion, more than double the country’s budget gap last year at P660.2 billion or 3.4 percent of GDP.
As of end-may this year, the country’s budget deficit expanded to P562.2 billion, nearly 695 times as much as the previous year’s budget gap of only P809 million for the period.
This was on the back of increased disbursements and drop in revenue collections due to the Covid-19 pandemic. The country’s debtto-gdp ratio is also seen to increase to 49.8 percent this year from 39.6 percent last year.
Despite the projected increase in the country’s debt-to-gdp ratio, economic managers had said this is still far lower than the most recent peak of 71.6 percent in 2004.
A budget deficit occurs when expenditures exceed revenues, while the debt-to-gdp ratio is used to gauge a country’s ability to pay its debt.