Global bond sale boosts state borrowings in May

MANILA, Philippines —  The government accumulated P259 billion in borrowings in May due to the issuance of global bonds in its first foray in the international debt market this year.

Data from the Bureau of the Treasury showed total borrowings in May reached P259.334 billion, soaring by 77 percent compared to the P146.78 billion in May 2023.

This came after the Philippines secured $2 billion (P115.25 billion) from the international debt market via a dual-tranche global bond issuance.

The government borrowed $1 billion for its 10-year tenor with a coupon of 5.25 percent.

Its 25-year sustainability bond, on the other hand, fetched an average rate of 5.6 percent and raised another $1 billion.

Same month last year, there was no issuance of any global bonds.

In terms of external debt, the Treasury secured P127.61 billion, up by more than 700 percent from just P15 billion in the comparative period.

Apart from the bulk borrowings due to the global bonds, there was also P12.37 billion in various project loans.

For May this year, borrowings from local lenders reached P131.72 billion, almost the same level in the same period last year.

A little over 90 percent of the domestic borrowings at P121.72 billion was from fixed rate Treasury bonds.

The government borrowed the remaining P10 billion from short-term T-bills.

During the same month last year, the government borrowed more T-bills at P31.79 billion but lesser long-term securities at P100 billion.

For the five-month period, borrowings jumped by 16 percent to P1.42 trillion from the P1.22 trillion sourced in January to May 2023.

As of end-May, domestic borrowings surged by 33 percent to P1.17 trillion while offshore financing went down by 27 percent to P251.71 billion.

During the January to May period, the government already used up 55 percent of the adjusted borrowing plan it crafted for the year which is at P2.57 trillion.