Gov't borrowings up 47% to P456.8 B

MANILA, Philippines - Total government borrowings rose to P456.816 billion as of end-July, 47 percent higher than the P309.800 billion the government borrowed in the same period last year, according to the latest data from the Bureau of Treasury (BTr).

This as the government continues to borrow from both the foreign and domestic markets to finance its budgetary needs.

However, total borrowings in the seven-month period showed that the government has been successful in reducing the foreign component of its debt.

The Aquino administration wants to reduce its foreign debt component to help cushion the economy from foreign exchange fluctuations.

Of the P456.816 billion it borrowed in January to July, gross domestic borrowings amounted to P363.052 billion. This is higher than the P172.108 billion the government borrowed from the domestic market in the same period last year.

On the other hand, gross external borrowings declined to P93.764 billion in January to July from P137.692 billion a year ago, data from the Treasury also showed.

Of the P93.764, project loans amounted to P10.743 billion while program loans stood at P16.986 billion.

The government also borrowed the equivalent of P66.035 billion in global bonds in January.

In the same period last year, project loans from various multilateral agencies amounted for P13.772 billion while program loans amounted to P4.237 billion.

The government also issued the equivalent of P119.683 billion in global bonds in the comparative period last year, of which P54.770 billion was issued in January 2011 and P64.913 billion was issued in March 2011.

The government borrows from local and foreign sources to plug a widening budget gap that is projected to hit P279 billion this year or 2.6 percent of gross domestic product (GDP).

For the remainder of the year, the government is still expected to plug its remaining foreign commercial borrowing requirement of $750 million.

The Bangko Sentral ng Pilipinas (BSP) has been urging fiscal authorities to source the $750 million domestically.

 Furthermore, the government is also eyeing to issue at least P60 billion in retail treasury bonds (RTBs) in the latter part of the year as part of its program to provide investors investment facilities.

The issuance of RTBs is part of the government’s savings mobilization program designed to make government securities available for retail investors and at the same time create savings consciousness among Filipinos.

With RTBs, investors can buy the debt paper for a minimum of P5,000.