NG borrowings climb to P657 B in Q1

Government borrowings rose by 5.31 percent to P656.72 billion in the first quarter from P623.6 billion a year ago due to the issuance of euro-denominated securities and domestic retail bonds during the period, according to the Bureau of the Treasury (BTr).

According to the BTr, gross domestic borrowings amounted to P510.03 billion in the first quarter, 3.96 percent higher than the P490.62 billion in the same period last year.

The bulk of the amount came from the issuance of P310.77 billion worth of three-year RTBs in February.

Of the total amount, P250 billion came in the form of new investments, while the remaining P60.8 billion was switch tender offers.

Meanwhile, borrowings from fixed-rate Treasury bonds (T-bonds) in the first quarter reached P128.79 billion. Auctions for Treasury bills also yielded P70.48 billion.

External borrowings grew by 10.3 percent to P146.69 billion in the first quarter from P132.98 billion last year.

The BTr said about P67 billion of the amount came from the issuance of three-year and nine-year eurodenominated global bonds also in February.

During the fund raising activity, the Philippines was able to sell 600 million euros worth of three-year global debt papers and another 600 million euro in nine-year securities, both of which were priced at tight spreads.

The Philippines also received a program and project loans during the quarter amounting to P72.72 billion and P6.64 billion, respectively, coming from various multilateral agencies and development partners.

For March alone, gross borrowings declined by 77.06 percent to P72.15 billion from P314.47 billion in the same month last year, mainly due to the timing of the government’s RTB issuance last year.

The government borrows from both local and foreign creditors to plug its fiscal deficit, which is currently projected to reach P1.56 trillion or 8.1 percent of gross domestic product (GDP) because of the coronavirus pandemic.

It also allots a portion of its budget for the settlement of obligations on a monthly basis, depending on their maturity.

In a separate report, the BTr said the government spent P339.98 billion in the first quarter to pay its debt. This was 54.4 percent higher than the P220.2 billion debt service recorded in the same period last year.

Of the total amount, P220.1 billion was used for the amortization of loans, while another P119.88 billion went to interest payments.