Government borrowings down to P28.65 B in August

MANILA, Philippines - Gross borrowings decreased in August from a year ago although they remain up in the first eight months compared with last year’s tally, latest data from the Bureau of the Treasury showed.

The national government borrowed P28.65 billion in August, down 12.17 percent from last year. Broken down, the bulk of borrowings remained source from domestic creditors.

In particular, local borrowings hit P27.2 billion, while their external counterparts amounted to P1.45 billion. They went down 7.3 and 55.7 percent, respectively.

The government borrows from the local and foreign creditors to finance its budget deficit and pay existing debts.

For this year, the Duterte administration widened the deficit cap to three percent of gross domestic product from just two percent when it took over last June 30. Deficit means the government intends to spend more than it earns.

The gap, hence, is financed through borrowings. For the first eight months, gross borrowings were up 22.02 percent to P307.8 billion.

Of the total amount, P80.25 billion was used to settle existing liabilities, data showed.

By source, domestic credit reached P225.76 billion during the eight-month period, while those from offshore and foreign currency-denominated hit P82.04 billion.

For August alone, local borrowings went down after the government issued less Treasury bills than last year, while Treasury bond values were steady.

T-bills and T-bonds are investment instruments issued for a specific period and paid with interest every quarter. The former has a shorter term of up to one year, while the latter can run up to 25 years.

Figures showed T-bonds issued during the month remained at P25 billion, while a net floatation of P2.2 billion was recorded for T-bills, down from P4.34 billion a year ago.

Net floatation means there were more T-bills issued than paid for.

At the same time, lower withdrawals from existing projects loans pulled down external borrowings to P1.45 billion, data showed.

Project loans are funds borrowed for specific projects tied up to conditions. For August, the Philippines made withdrawals from projects financed by the Asian Development Bank, World Bank, Japan International Cooperation Agency, International Fund for Agricultural Development and Japan Bank for International Cooperation.

For 2017, the Duterte government aims to borrow P631.29 billion, down by a little more than a tenth from this year’s planned P695.42 billion.

National Treasurer Roberto Tan earlier said borrowings this year may fall below program, without citing data.