Gov’t borrowings down

MANILA, Philippines - Government borrowings slightly declined in the first 11 months of 2014 due to lower borrowings from the domestic market.

Based on data from the Department of Finance, the government borrowed P330.72 billion from January to November 2014, down from P333.25 billion a year ago.

Of the total amount, P235.12 billion was sourced locally mainly through the sale of treasury bonds. The amount marked a 53.8 percent drop from the P509.28 billion recorded in the 11 months ending November 2013.

On the other hand, foreign borrowings, done largely by tapping loans from development lending institutions, grew more than three-fold to P95.6 billion.

Debt secured from foreign lenders was in the form of P55.34 billion in program loans and P11.59 billion in project loans aimed at supporting post-Yolanda relief and recovery initiatives.

The government borrows to pay maturing obligations and plug the deficit in its budget. The higher the fiscal deficit, the higher will be the borrowing requirements of the government.

In November alone, borrowings by the government increased to P33.9 billion from P31.52 billion.

Debt incurred from the domestic market went up to P33.28 billion from P30.65 billion.

The country’s outstanding debt rose to P5.72 trillion as of the end of November last year due to higher domestic obligations.  A big chunk of this amount or 66 percent was accounted for by peso-denominated liabilities while the balance of 34 percent comprised debts denominated in foreign currencies.

The government has programmed to borrow about P700.8 billion from both domestic and foreign sources this year.

Of the P700.8 billion, P606.1 billion will come from the domestic market and the remaining P95.7 billion from foreign lenders. This would be equivalent to a borrowing mix of 86:14 in favor of domestic credit.