PHL gross borrowing declines 40.59% at end of June

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GROSS BORROWING dropped 40.59% from a year earlier to P1.022 trillion in the first half as the government tapped less debt as the economy reopened.

The Bureau of the Treasury (BTr) said that in June, it raised P138.64 billion, down 13.3% from a year earlier.

The government borrows from domestic and foreign creditors to finance the budget deficit, which widened after the pandemic stalled the economy and depressed tax collection.

New domestic debt in June fell 28.71% year on year to P96.45 billion, including P7.51 billion in Treasury bills (T-bills) and P88.94 billion in Treasury bonds (T-bonds).

In June, the Treasury made no redemptions using the government’s Bond Sinking Fund.

External gross borrowing rose 55.83% to P49.72 billion in June. This consisted of P47.53 billion in new program loans and P2.19 billion in project loans.

The government settled P7.17 billion in outstanding foreign debt that month, reducing net external borrowings to P42.55 billion.

The P1.022 trillion in first-half debt included P741.26 billion in domestic debt, down 55.02% from a year earlier.

Domestic debt consisted of P535.38 billion in T-bonds, P457.8 billion in retail T-bonds, and P73.6 billion in T-bills.

During the period, the government paid down P251.92 billion worth of T-bills.

Excluding the P1.09-billion debt that was repaid and obligations settled via the Bond Sinking Fund, the government’s net domestic borrowing was P740.18 billion.

Gross borrowing from foreign creditors rose 15.58% to P329.34 billion in the first half, including P136.6 billion in program loans, P117.33 in global bonds, P46.85 in project loans, and P28.55 in Samurai bonds.

The BTr paid down P47.76 billion in foreign loans during the period, bringing net foreign borrowing to P281.57 billion.

In July, Finance Secretary Benjamin E. Diokno said that the government intends to increase the share of domestic borrowing in the borrowing mix to 80% to reduce its foreign exchange risk.

Gross borrowing in the first half accounted for 41.32% of the P2.47 trillion the government is planning to raise this year from both domestic and foreign lenders. The budget deficit is expected to hit 7.6% of gross domestic product.

In the first six months of 2022, revenue collection increased 15.91% to P1.73 trillion, while expenditure rose 8.85% to P2.4 trillion.

The Philippines’ debt stock hit P12.495 trillion at the end of May. — Diego Gabriel C. Robles