Gov’t borrowings breach ₱2 T in August

Government borrowings breached the ₱2-trillion mark in August this year as the Duterte administration needed funds to bridge the gap between its dwindling revenues and required spending level amid the coronavirus-induced recession.

Data from the Bureau of the Treasury showed that total government financing soared by 202 percent in January to August this year to ₱2.469 trillion from ₱816.27 trillion in the same period last year.

Bulk of the borrowings were sourced from the local market with ₱1.96 trillion, composed of ₱827.12-billion retail treasury bonds, ₱447.8-billion long-dated IOUs, ₱385-billion Treasury bills and a ₱300-million loan from the central bank.

The end August domestic financing was 263 percent higher than the ₱540.72 billion in the previous year.

The government also borrowed ₱509.7 billion from foreign creditors in the first eight months of the year, up by 85 percent compared with ₱275.55 billion a year ago.

Of the total offshore borrowings, ₱306.53 billion were raised through program loans, while ₱118.73 billion were proceeds from the sale of global bonds, and ₱67.33 billion from the euro debt markets.

The government also borrowed ₱17.09 billion in project loans during the period.

In August alone, the national government borrowed ₱612.91 billion from domestic and foreign creditors, higher by 701 percent compared with ₱76.52 billion in the same month in 2019.

Last month, local financing stood at ₱584.37 billion, an increase of 1,869 percent from only ₱29.67 billion a year ago. Bulk of which were retail treasury bonds with ₱516 billion, followed by shortterm debt notes worth ₱38.03 billion and bonds with ₱30 billion.

On the other hand, foreign borrowing in August declined by 39 percent to ₱28.54 billion from ₱46.85. billion in the previous year. There were ₱26.5 billion worth of program loans release and ₱2.04billion project loans.

For 2020, the national government plans to borrow ₱3 trillion from domestic and foreign creditors to finance the Duterte administration’s fiscal deficit ceiling of ₱1.815 trillion.

But Finance Secretary Carlos G. Dominguez III said last week that the government may still borrow less than programmed for the rest of the year should the government’s two main tax agencies continue to exceed their downscaled collection targets.

While the Bureau of Internal Revenue (BIR) and Bureau of Customs were about 12 percent below their collections last year as of August, Dominguez noted that the two agencies have recently shown “positive developments.”

Data from the DOF showed the BIR and Customs have raised ₱1.527 trillion in January to August this year, higher than their revised collection target of ₱1.636 trillion by 7.2 percent, but lower than last year’s ₱1.863 trillion.