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Gov’t borrowings up 214.45% in first 10 months

Government borrowings in the first 10 months of the year jumped by 214.45 percent year-on-year primarily due to requirements to address the coronavirus disease 2019 pandemic.

Bureau of the Treasury (BTr) data showed total borrowings, as of end-October this year, reached P2.706 trillion, way higher than the P843.482 billion in the same period last year.

Bulk of the financing is accounted for by those sourced domestically, with a net amount of P2.259 trillion while the balance of P446.46 billion is accounted for by external financing.

Economic managers have set a P3-trillion borrowing program each for 2020 and 2021, and domestic fundraising accounts for the bulk at 75 percent through the issuance of treasury bonds (T-bond), treasury bills (T-bills), and retail treasury bonds (TRB), among others.

Of the total commercial external loans for this year, EUR 1.2 billion came from the issuance of three and nine-year US dollar-denominated debt papers in January and USD2.35 billion from the sale of 10-year and 25-year bonds in April.

Aside from commercial borrowings, the government is also tapping lending programs of various multilateral companies to further augment Covid-19-related programs.

The Bangko Sentral ng Pilipinas has also extended some short-term borrowings to the national government.

It lent the national government a P300-billion credit support in March through a repurchase deal for the acquisition of government securities. This was settled on Sept. 29.

Its policy-making Monetary Board also approved on Oct. 1 the national government’s request for a P540-billion provisional advance.

BSP’s Charter authorizes the central bank to extend financial aid to the national government with an amount that is equivalent to 20 percent of the latter’s average revenues in the last three years, which to date is about P540 billion.

Finance Secretary Carlos Dominguez IIII said funding augmentation from the central bank is the national government’s reserve option, citing that commercial borrowing remains the main preference.*PNA

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April 2021
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