Government trims borrowings by 25 percent in July

MANILA, Philippines — The government reduced its borrowings by a quarter to P132 billion in July, largely coming from the domestic market.

Data from the Bureau of the Treasury showed total borrowings in July reached P131.94 billion, as compared to P174.95 billion in July 2022.

During the month, borrowings from local lenders slipped by 34 percent to P110.5 billion from P167.81 billion secured in the same period last year.

A huge chunk or 98 percent of the domestic borrowings, at P108.38 billion, was from fixed-rate Treasury bonds.

The government borrowed the remaining P2.12 billion from short-term T-bills.

During the same month last year, the government borrowed more T-bonds at P175 billion, but it managed a net redemption of P7.19 billion in T-bills.

In terms of external debt, the Treasury tripled its borrowings to P21.44 billion from just P7.14 billion from foreign sources in July.

The entire external financing was made up of program loans from multilateral institutions.

For the seven-month period, borrowings jumped by 25 percent to P1.55 trillion from the P1.25 trillion sourced in January to July 2022.

As of end-July, domestic borrowings picked up by nearly 30 percent to P1.17 trillion while offshore financing increased by 15 percent to P387.88 billion.

This means the government already used up 70 percent of the P2.21-trillion borrowing plan it crafted for the year.

Next year, the government will increase its borrowing program by a little over 10 percent to P2.46 trillion, still in favor of domestic creditors.

Sourcing from the domestic market is part of the administration’s prudent debt management strategy and its initiatives to further develop the domestic capital markets.