THE NATIONAL GOVERNMENT gross borrowing rose 35.6% from a year ago to 1.653 trillion pesos in the four months to April after the state returned to the global debt market twice in the month latest.
The latest data from the Treasury Office (BTr) showed that new debts incurred during the period exceeded the 1,200 billion pesos recorded from January to April 2020.
April alone posted 271.95 billion pesos in gross borrowing, up 3.5% from 262.75 billion pesos the previous year. On a monthly basis, the total in April was up 95% from 139.33 billion pesos in March.
Domestic debt accounted for 39% of the total, while the rest came from foreign creditors.
New debt obtained in the local market jumped 38.3% to 106.15 billion pesos last month from 172.1 billion pesos a year ago, split into 95 billion pesos in treasury bills (T -bonds) and 11.15 billion pesos in treasury bills (T -bills).
The Treasury made no amortization payments that month except for repurchases of 38.165 billion pesos made from the bond sinking fund (BSF).
Meanwhile, foreign borrowing jumped 83 percent to 165.8 billion pesos from 90.65 billion pesos in the same month last year, mainly due to 121.97 billion pesos and 24.2 billion pesos. pesos of euro-denominated and samurai bond issues, respectively.
On April 13, the Treasury issued 55 billion yen of Japanese yen-denominated three-year bonds with a coupon set at 0.001%. For its second issue this year, the government settled on April 28 the 2.1 billion euros it raised from a triple tranche offbonds denominated in euros.
The state also had additional project loans worth 9.966 billion pesos in April, as well as 9.68 billion pesos in program loans.
Excluding the P2304 billion debt service bill from its external debt, total net borrowing last month reached Pesos 163.5 billion, up 91 percent year on year.
In the four months to April, local debt represented 85.2% of total borrowing of P 1.653 billion while the rest came from offbank.
Gross local borrowing reached 1,408 billion pesos, up 43% from 982.13 billion pesos a year ago.
This breaks down into 540 billion pesos in short-term central bank loans, 463 billion pesos in retail treasury bills, 294 billion pesos in treasury bills and 111 billion pesos in treasury bills.
Minus the amortization payments of 291 billion pesos, four-month net borrowing was 1,356 billion pesos, up 47% from 921.105 billion pesos a year ago.
External borrowing, meanwhile, totaled 245.25 billion pesos during the period, slightly higher by 3.34% than 237.33 billion pesos a year ago.
It consists of 122 billion pesos in euro-denominated bonds, 72 billion pesos in program loans, 27 billion pesos in new project loans and 24.2 billion pesos in âsamuraiâ papers.
The government repaid 145.1 billion pesos of its foreign bonds during those four months, reducing its net borrowing to 100.15 billion pesos so far, up 27% year-on-year.
Minus all amortization payments, overall net government borrowing amounted to 1,457 billion pesos in January-April, up 38% from 1,058 billion pesos a year ago.
In an economic bulletin, the Department of Finance said that lessons from previous crises, such as the 1984-1985 debt crisis and the Asian financial crisis, have shown that the Philippines is “best suited to cope with external and internal shocks by maintaining solid macroeconomic fundamentals “.
âConservation policies require transparent and prudent deficit and debt management. The overall and consolidated public sector, except NG ministries and agencies, should be part of the budget, âthe finance ministry said.
âDebt benchmarks should be put in place to avoid over-indebtedness. The economic returns of the project must be greater than the costs of the project to ensure that debts can be repaid. Public sector borrowing must be approved by the independent monetary authority (BSP) to ensure compliance with this good practice, âhe added.
The government is seeking to raise 3 trillion PPPs this year from domestic and external lenders to help finance its budget deficit, which is expected to reach 8.9% of gross domestic product (GDP). – BMLaforga