Borrowings decreased in August.

The government of the nation (NG)

The Bureau of the Treasury (BTr) reported a decrease of 6.96% in gross borrowings to P124.056 billion for the month of August.     

The BTr reported that borrowing in August was less than P133.338 billion borrowed in August 2022.

In July, there was a 5.97% decrease in gross borrowings compared to the previous month, with a total of P131.937 billion borrowed.

During the month of August, domestic borrowings made up the majority, or 94.6%, of the total amount borrowed.

The total amount of debt within the country decreased by 11.09% to P117.374 billion in the current month, compared to P132.021 billion in the same month last year.

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The government has issued P7.139 billion in fixed-rate Treasury bonds and P7.139 billion in Treasury bills.

13 percent in the third quarter

In the third quarter, there was a 13 percent increase in gross external debt.fi

External loans for new projects contributed to an increase in funds from P1.317 billion to P6.682 billion in August, compared to the previous year.

From January to August of this year, the National Government’s total debt increased by 21.76% to reach P1.68 trillion, compared to P1.38 trillion in the same period of the previous year.

In the first eight months, the majority (76.5%) of total borrowings were from domestic sources. There was a 23.37% increase in gross domestic borrowings, rising from P1.04 trillion to P1.28 trillion.

2017

In 2017, the total amount was P904.76 billion.fi

The total amount of fixed-rate Treasury bonds is P283.763 billion, P283.763 billion in retail Treasury bonds, and P95.842 billion in Treasury bills.

At the end of August, the amount of external debt was P394.562 billion, which is 16.81% higher than the amount of P337.794 billion in the same period last year.

This was composed of P163.607 billion in global bonds, P145.059 billion in program loans, and P85.869 billion in new project loans.

According to a message sent on Viber by Nicholas Antonio T. Mapa, a Senior Economist at ING Bank N.V. Manila, the decrease in gross borrowings during August can be attributed to a reduced need to borrow as revenue streams return to normal levels.  

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With the rise of the economic reopening narrative, the government’s tax revenue collections played a crucial role in reducing the budget deficit.fi

According to Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort, the recent reduction in CIT has lessened the need for extra borrowing. This information was conveyed through a Viber message.

Nevertheless, Mr. Ricafort pointed out potential risks such as increased interest rates that may result in higher borrowing expenses.

The central bank of the Philippines, BSP, has increased its policy rate by 425 basis points (bps) between May 2022 and March 2023. This has resulted in a key interest rate of 6.25%, the highest in nearly 16 years.

The Governor of the Bangko Sentral ng Pilipinas, Eli M. Remolona, Jr., has indicated the potential for a 25-basis point increase in interest rates at the November meeting, resulting in a benchmark rate of 6.5%.

This year, the National Government has set its borrowing program at P2.207 trillion, consisting of P1.654 trillion from domestic sources and P553.5 billion from foreign creditors. — Luisa Maria Jacinta C. Jocson