Government more than doubles borrowing in September

MANILA, Philippines — The government ramped up its borrowings for the second consecutive month, more than doubling to P488.64 billion in September amid higher rates here and abroad.

Latest data from the Bureau of the Treasury showed that total borrowings for September soared by 127 percent to P488.64 billion from the P215.106 billion in obligations in the same month last year.

This is the second month in a row that the government hiked its borrowings after seven consecutive months of decline as the economy continues to reopen.

The higher borrowings during the month can be attributed to rising interest rates globally, which also translate to increased yields in the domestic debt market.

Borrowings from local lenders jumped by nearly two-fold to P480.48 billion as against the P166.95 billion in September 2021.

External financing, however, plummeted by 83 percent to P8.17 billion from P48.16 billion.

The government has moved to reduce the country’s foreign exchange risk resulting from ongoing global uncertainties by focusing on domestic sources in its financing program.

For the nine-month period, borrowings slipped by 28 percent to P1.867 trillion from P2.602 trillion in 2021.

Domestic borrowings dropped by 27 percent to P1.52 trillion, while offshore financing also declined by 32 percent to P345.96 billion.

Broken down, Retail Treasury Bonds (RTBs) accounted for P420.45 billion of the domestic borrowings in September.

This was the first offering of RTBs under the Marcos administration in a bid to boost state coffers for various recovery projects.

The RTB-28 was a 5.5-year bond designed for retail investors as a low-risk and higher-yielding savings instrument.

Another P80 billion was secured through fixed rate T-bonds. At the same time, the government recorded a net redemption of P19.97 billion for T-bills in September.

On the other hand, project loans made up the entire foreign borrowings during the month at P8.165 billion.

There were no multi-tranche global bonds, samurai bonds, and program loans from multilateral institutions during the month.

As of the end-September, the government has used up about 84 percent of its borrowing plan it crafted for this year.

This year, the government plans to borrow P2.21 trillion, of which P1.65 trillion would come from domestic sources while the remaining P561.5 billion would be from external sources.

This is 13 percent lower than the P2.55 trillion total borrowings for the whole of 2021.