Government borrowings fall 90% in November

MANILA, Philippines - Rejections and partial awards made during bi-monthly auctions of Treasury papers pulled down government borrowings by 90 percent in November last year, the Bureau of Treasury reported yesterday.

Gross borrowings declined to P3.340 billion, down 90 percent from P33.704 billion in November 2014.

Broken down, foreign borrowings totaled P786 million, while their domestic counterparts amounted to P2.554 billion.

In November, local borrowings plunged after the amount of Treasury bonds and bills reduced dramatically. T-bonds and T-bills were sold to investors every two weeks last year.

Analysts said the government held off from selling local securities after interest rates rose in anticipation of their rising counterparts in the US. The US Federal Reserve raised borrowing levels for the first time in nine years last December.

T-bonds floated during the month decreased 55 percent to P9.73 billion, data showed. The amount was net of those issued and those paid during the period.

On the other hand, more T-bills were redeemed than issued. A net redemption-- meaning more debts were paid than borrowed-- worth P7.18 billion was recorded in November.

T-bonds and T-bills are issued to borrow money from local investors, who redeems the papers with interest at a later date. T-bills are payable up to one year, while T-bonds have payment terms up to 25 years.

Meanwhile, project loans used to finance specific government projects accounted for all foreign financing in November, figures showed.

Credit were sourced from the Asian Development Bank (P41 million), the World Bank (P122 million), Japanese multilateral institutions (P282 million) and the International Fund for Agricultural Development (P27 million).

From January to November last year, gross borrowings reached P317.044 billion, down 4.14 percent from previous year’s P330.721 billion.