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10-month borrowings reach P3.2T

THE government’s total gross borrowings reached P3.224 trillion in the first 10 months of 2020, breaching its P3-trillion full-year target after receiving a new round of cash advances from the central bank.

Data from the Bureau of the Treasury (BTr) showed year-to-date gross borrowings more than tripled from P967.56 billion in the same 10 months last year.

The latest tally was 7.5% higher than the P3-trillion program for 2020, after the provisional advances worth P540 billion from the Bangko Sentral ng Pilipinas (BSP) were remitted in October.

Borrowings in the first 10 months were 0.44% higher than the P3.21 trillion in combined gross borrowings recorded from 2016 to 2019.

In October, overall gross borrowings jumped 1,219% to P663.21 billion from P50.27 billion in the same month year ago. Around 96% of the borrowings were from local lenders.

Domestic borrowings rose 1,244% to P639.04 billion in October from P47.53 billion the year before, after short-term loans from the BSP worth P540 billion were remitted.

On Oct. 1, the BSP’s Monetary Board approved the new tranche of provisional advances, days after the government repaid the P300 billion worth of government securities issued through a repurchase agreement.

Local borrowings also included P69.05 billion in Treasury bonds (T-bonds) and P30 billion in Treasury bills (T-bills) issued via the BTr’s weekly auctions.

The Treasury made repayments of P329 million that month, taking the net domestic borrowings to P638.714 billion, which went up 1,260%.

External borrowings hit P24.17 billion in October, a reversal from the net redemption worth P1.17 billion a year ago. A net redemption occurs when more debts have been repaid than new debts incurred.

Of which, program loans amounted to P19.75 billion, while project loans stood at P4.42 billion. Less the P4.79 billion repayments made that month, net foreign debt reached P19.38 billion.

From January to October, local borrowings accounted for 82.2% of the total.

Year-to-date local gross borrowings reached P2.649 trillion, nearly quadruple the P673.805 billion the year prior.

Broken down, short-term loans from the central bank totaled P840 billion; funds raised through retail Treasury bonds (RTBs) reached P827.12 billion; T-bonds issued hit P561.91 billion; and T-bills stood at P420.31 billion.

It settled P698.9 billion in debt repayments in those 10 months, including the P300 billion of debt paid back to the BSP.

Foreign debt grew by 95.6% to P574.435 billion. This consisted of P364.64 billion in program loans, P23.73 billion in project loans, P118.74 billion of funds raised through the issuance of dollar-denominated global bonds, and P67.33 billion in euro-denominated bonds.

The Treasury made P128 billion of repayments during the period to bring the net foreign borrowings to P446.46 billion, up 160%.

Minus all the repayments made, overall net borrowings hit P2.706 trillion in those 10 months, up 221% year on year.

The budget deficit narrowed to P351 billion in September, but the nine-month shortfall was still 194% higher than the P879 billion from a year ago on the back of falling revenues and rising pandemic expenses.

The government runs a budget deficit as it spends more than the revenue it generates. The budget gap rose by 24.56% to P61.4 billion in October taking the 10-month shortfall to P940.6 billion, up 170% year on year.

The fiscal deficit is projected to hit 9.6% of gross domestic product this year. — Beatrice M. Laforga

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