Philippine govt borrowings breach 3 trillion peso mark

MANILA (Philippine Daily Inquirer/ANN): The Philippines’ borrowings from January to October hit P3.22 trillion, exceeding the P3-trillion full-year programme as the national government secured another P540 billion from the central bank Bangko Sentral ng Pilipinas (BSP) last month to bolster its war chest for Covid-19 response.

End-October gross domestic borrowings amounted to a record P2.65 trillion, bloated by the P840 billion in short-term borrowings through the BSP and the Bureau of the Treasury’s repurchase agreement, the latest national government financing data showed.

After the initial P300 billion borrowed from the BSP at the onset of the pandemic in March was repaid in September, the national government again tapped the central bank for a bigger amount of financing in October.

National Treasurer Rosalia de Leon earlier noted that the repo with the BSP involved rollover debt or extended liabilities.

The government had programmed short-term borrowings from the BSP at P500 billion this year and P1 trillion next year.

The Treasury also raised funds to be spent on fighting Covid-19 from its auction of short-dated treasury bills, with a net of P420.3 billion as of October; P561.9 billion from fixed-rate treasury bonds and P827.1 billion from retail treasury bonds (RTBs).

On top of local fund-raising, the government borrowed a total of P574.4 billion from foreign sources during the first 10 months.

The 10-month external borrowings pile included P364.6 billion in programme loans and P23.7 billion in project loans from bilateral development partners and multilateral lenders; P118.7 billion in dollar-denominated global bonds as well as P67.3 billion in euro bonds.

The end-October total borrowings already nearly matched the gross financing obtained by the national government from 2016 to 2019, which totalled P3.32 trillion.

The Philippines’ debt-to-gross domestic product (GDP) ratio reached 51.2 per cent as of September, the highest since 2010, as its outstanding obligations jumped 18.5 per cent year-on-year to P9.37 trillion while the economy shrank by an average of 10 per cent during the first nine months.

Debt-to-GDP had been projected to jump to 53.9 per cent by end-2020 — poised to be the highest since 2006’s 58.8 per cent — from a record-low of 39.6 per cent in 2019. - Philippine Daily Inquirer/Asia News Network

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