National government borrowings decline in October 2018

MANILA, Philippines — The national government reported lower borrowings last October as both debt from domestic and external sources declined during the month, the Bureau of the Treasury (BTr) reported.

According to the latest data from the BTr, the national government’s gross borrowings last October reached P34.10 billion, 10.21 percent lower than the P37.98 billion posted in the same month in 2017.

Despite this, overall borrowings from January to October still grew 8.41 percent to P717.39 billion from P661.76 billion in the comparable period of last year.

The government borrows from both domestic and foreign lenders to finance its budget deficit which is currently targeted at three percent of the gross domestic product for 2018.

BTr data showed bulk or P32.29 billion of the total borrowings last October came from domestic sources, 10.21 percent down from last year’s level of P35.96 billion.

Of this amount, P22.55 billion came in the form of Treasury bills (T-bills), while only P9.74 billion was raised through Treasury bonds (T-bonds).

The auction committee of the BTr only partially awarded tenders for five-year T-bonds last Oct. 9, while it rejected all bids for its seven-year T-bond offering last Oct. 23.

On the other hand, the BTr had two successful auctions for T-bills during the month, while the three remaining T-bill auctions last October had partial awards.

Meanwhile, the BTr said the government’s external borrowings in October also fell 10.22 percent to P1.81 billion from P2.016 the same month last year.

This amount came in the form of project loans from multilateral agencies, such as the World Bank, Asian Development Bank and Japan International Cooperation Agency.

As of end-October, the national government’s gross borrowings from domestic and foreign lenders amounted to P431.3 billion and P286.09 billion, respectively.

Domestic borrowings was 13.67 percent lower than the P499.61 billion recorded the same period last year, while external debt jumped 76.43 percent as compared to last year’s level of P162.15 billion.

To recall, the government raised P102.68 billion in funds from the issuance of US-dollar denominated global bonds in February, followed by another P12.014 billion from Panda bonds or renminbi-denominated securities last March.

Another P74.04 billion was borrowed through a Samurai bond issuance in August.

For 2018, the national government is programmed to borrow P986 billion from local and foreign lenders.

This is expected to rise 20 percent to P1.19 trillion next year in expectation of the higher fiscal deficit next year.