NG BORROWINGS RISE 92%

The Treasury chief acknowledged the BTr has yet to assess the pace of government spending in the months ahead

The national government (NG) ramped up its borrowings in the first six months this year to take advantage of favorable financing costs while in pursuit of accelerated disbursement, the Bureau of the Treasury (BTr) said on Tuesday.

Data from the BTr show that NG financing, both from external and domestic sources totaled P732.18 billion in the first six months, a 92.7 percent hike from only P379.95 billion in the same period a year ago.

National Treasurer Rosalia de Leon said this development was motivated by significantly lower cost of financing and a duplication of NG’s frontloading activities back in the last quarter of 2017.

“Recall that in 2017 we partially frontloaded 2018 financing in the fourth quarter of 2017, mindful of higher rate trajectory with the US Fed policy actions as well as the Bangko Sentral ng Pilipinas policy rate hikes in 2018,” De Leon said in a text message.

“During first half of this year, we also disbursed program loans unlike in 2018 when these were disbursed during second half of year,” she added.

Data show lending rates across the Philippines improved from 4.7 percent in the first three months this year to only 4.5 percent in the second quarter and helped convince NG to accelerate its borrowing activities, pursue its disbursement program in earnest consistent with the larger goal of boosting the country’s public infrastructure.

Excluding payments, NG borrowed a total of P209.13 billion in the fourth quarter of 2017, the bulk of which was in December worth P229.94 billion.

Of the overall figure, the NG sourced its financing requirement from domestic sources in the form of Treasury bills and retail Treasury bonds.

Net financing from domestic sources totaled P614.71 billion for the January to June 2019 period, 102.09 percent higher than only P304.16 billion in the same period in 2018.

Likewise, net financing from external sources in the form of euro-denominated bonds, grew 55 percent to P117.46 billion from only P75.78 billion in the same comparable period.

The Treasury chief acknowledged the BTr has yet to assess the pace of government spending in the months ahead.

“(We), will have to assess pace of disbursements, market conditions, progress in passage of budget etc.,” De Leon said.

THE Bureau of Treasury headquarters in Intramuros, Manila. The agency reported that national government borrowings hit P732.18 billion during the first half of 2019.