Government borrowings down 27% to P269 billion in 8 months

MANILA, Philippines - The government’s total borrowings went down by 26.5 percent to P269.15 billion during the first eight months of the year from P365.99 billion a year ago, the Bureau of the Treasury reported yesterday.

Of the total amount, borrowings from domestic creditors dropped by roughly 60 percent to P127.15 billion during the review period from P316.93 billion a year ago.

The Treasury said the drop was due largely to the redemption of more Treasury bills (T-bills) this year compared to the same period in 2008.

The Treasury settled P527.58 billion worth of 91-, 182- and 364-day T-bills but issued only P372.65 billion worth of the same government papers from January to August. It also issued P274.13 billion worth of three, five, seven, 10- and 20-year treasury bonds during the period, data from the Treasury showed.

Officials also attributed the higher local borrowings in 2008 to roughly P60 billion worth of three and five year retail treasury bonds sold last year.

Despite the decline in local borrowings this year, the Treasury recorded an increase in foreign borrowings during the eight-month period to P142 billion from only P49.06 billion recorded in the same period in 2008.

In terms of commercial borrowings, the government has so far raised $2.25 billion from foreign commercial sources or $1.5 billion last January and another $750 million last July.

Aside from commercial borrowings, the government also tapped more official development assistance loans (ODA) from multilateral lending institutions such as the World Bank, Asian Development Bank and the Japan Bank for International Cooperation.

The Treasury reported that program loans disbursed during the period jumped 53 percent to P21.31 billion from P13.93 billion recorded a year ago.

These program loans included the P9.622 billion from the World Bank’s International Bank for Reconstruction and Development for “Food Crisis Response,” another P7.056 billion from ADB for the “Government Justice Reform,” and P4.63 billion from JBIC for the Development Policy Loan.

Project loans, meanwhile, amounted to P13.25 billion during the period or 10.3 percent lower than the previous year’s P14.78 billion.

Treasury officials said that domestic borrowings would likely increase in September following the successful sale of three-, five- and seven-year retail treasury bonds that raised roughly P115 billion or higher than the P77.6 billion it raised in 2007.