8-MONTH BORROWINGS HIT 16-YR HIGH OF P2.47T

GROSS borrowings of the national government from January to August have risen to P2.47 trillion, the highest in 16 years.

Latest data from the Bureau of the Treasury showed the endAugust figure surpassing the government’s annual borrowing levels since 2004.

The amount the government borrowed in eight months is already equivalent to over 80 percent of the all-time high P3-trillion borrowing program the economic managers have set this year to cover the 2020 budget deficit and finance its spending needs amid the Covid-19 pandemic.

From only P916.271 billion in the same period last year, government’s gross borrowings as of end-august this year surged by 169.6 percent.

This, as government’s gross borrowings for the month of August alone rose eightfold to P612.913 billion from only P76.524 billion in the same month in 2019 following the record-high sale of P516.3 billion in Retail Treasury Bonds (RTBS).

From January to August this year, 79 percent of the borrowings were sourced locally and the remaining 21 percent, from foreign sources.

Gross domestic borrowings have ballooned to P1.96 trillion during the eight- month period, triple last year’s P640.725 billion.

The government was able to borrow mostly from the local debt market through its issuance of RTBS (P827.107 billion), Fixed Rate Treasury Bonds ( P447.859 billion), Treasury Bills (P385.297 billion), and domestic loans under the repurchase agreement with the Bangko Sentral ng Pilipinas (P300 billion).

On the other hand, gross foreign borrowings for the same period jumped to P509.691 billion, nearly an 85- percent increase from P275.546 billion last year.

The government borrowed money from foreign lenders through program loans (P306.536 billion), global bonds ( P118.735 billion), Euro Bonds (P67.329 billion) and project loans ( P17.091 billion).

For the month of August, gross domestic bor rowings jumped 19- fold to P584.374 from just P29.670 billion in the same month last year.

Meanwhile, gross foreign borrowings for the month sank by 39.1 percent to P28.539 billion from P46.854 billion in August 2019.

The government has yet to release the data on the national government’s outstanding debt as of endAugust but as of end-july, the country’s debt stock soared 17.4 percent to P9.16 trillion from P7.8 trillion in the same period year ago.

The Development Budget Coordination Committee (DBCC) also expects the country’s debt-to- GDP ratio this year to increase to 53.91 percent of GDP—A level it has not seen in over a decade—from a record low of 39.6 percent of GDP last year.

By the end of this year, the national government expects its outstanding debt to reach P10.16 trillion, up by 31.42 percent from last year’s amount.

As tax collections are down amid the pandemic, the DBCC projects the country’s budget deficit to more than double to 9.6 percent of GDP or P1.815 trillion from only 3.4 percent of GDP or P660.2 billion last year.

NONIE REYES A bespectacled Santa Claus strikes a pensive pose—much like the man seated in this store for Christmas displays in Dapitan, Manila—both perhaps pondering how to spend the holidays this year with as little disruption and gloom as possible. With the Philippines’s Christmas celebration being the world’s longest, industries that had thrived on it want to mitigate the pandemic’s impact on sales. Vendors, like this masked woman, said they lowered price ranges to encourage consumers to buy and to keep their business alive. Private-sector leaders think the government can use the season to boost the economy by putting cash in people’s hands so they will spend. See boxed story, below.