MANILA, Philippines - The government had cut its borrowings by more than 40 percent in first 10 months of the year with domestic liabilities declining by more than half amid a solid cash position.
Based on latest data released by the Department of Finance, the government borrowed a total of P297.02 billion from January to October this year, down 43 percent from the P520.38 billion in the same period last year.
A bigger chunk or about P201.84 billion was sourced locally, mainly through the sale of treasury bills and bonds. The amount was 58.8 percent lower than the P490.28 billion in borrowings registered a year earlier.
On the other hand, foreign borrowings, done largely by tapping loans from development lending institutions, surged more than three-fold to P95.18 billion from only P30.1 billion the previous year.
The bigger share of domestic borrowings was in line with the Aquino administration’s efforts to ward off pressures on the exchange rate.
The continued downward trend in debt reflects the strength of the government’s liquidity position even as the country recovers from a string of natural calamities.
The government borrows funds to pay maturing obligations and plug the deficit in its budget.
In October alone, borrowings plunged by more than two-third to P16.92 billion.
Of the borrowings last month, P16.04 billion came from the domestic market while P880 million came from foreign lenders.
Debt incurred from the domestic market was 69.15 percent lower than the P52 billion recorded in October last year.
Foreign borrowings for October likewise fell 58 percent to P880 million.
The Asian Development Bank, the World Bank and Japan International Cooperation Agency are the biggest sources of official development assistance (ODAs).
The Aquino administration is sticking to its policy of borrowing more from domestic sources to avoid too much exposure to foreign exchange risks. Its debt had ballooned in the late 1990’s following the sharp devaluation of the peso against the US dollar.
The country has programmed to borrow P715 billion this year, of which P620 billion will be sourced locally for a borrowing mix of 85:15 in favor of domestic.