Gov’t borrowing drops 2.07% in first 8 months of 2015

MANILA ,Philippines ­ – A decline in local loans has led to a 2.07% fall in the government’s gross borrowings in the first 8 months of the year.

The total amount borrowed by the government from domestic and international creditors as of end-August dropped to P252.26 billion ($5.414 billion) compared to the P257.6 billion ($5.528 billion) recorded in the same period in 2014, according to the Bureau of the Treasury.

The decrease was led by the decline in local financing, which fell to P148.14 billion ($3.17 billion) from the P168.64 billion ($3.619 billion) borrowed in January to August last year.

August borrowing

For August alone, government borrowings totaled to P32.62 billion ($700 million), 42.97% higher than the previous year’s level.

The bulk of the amount or P29.34 billion ($629.7 million) was accounted for by local loans while the remaining P3.28 billion ($70.49 million) was borrowed from international creditors.

8-month Domestic debt

The government issued P147.39 billion ($3.169 billion) worth of fixed-rate treasury bonds and P740 million ($15.88 million) in treasury bills during the 8-month period.

Payments for local debt amounted to P142.4 billion ($3.056 billion), resulting to net domestic borrowings of P5.74 billion ($123.1 million).

8-month Foreign debt

On the other hand, international borrowings saw a 17.05 % increase as it amounted to P104.12 billion ($2.234 billion) from the P88.95 billion ($1.909 billion) registered in the same period in 2014.

The government was able to borrow from foreign sources through project and program loans, with P20.42 billion ($438.2 million) and P49.05 billion ($1.052 billion), respectively.

The government also raised P34.65 billion ($743.6 million) from a global bond swap at the start of the year. 

Payments for foreign debt amounted to P50.08 billion ($1.074 billion), which resulted to a net external financing of P54.05 billion ($1.160 billion).

Borrowing forecasts

Meanwhile, the government’s gross borrowings for 2016 is proposed at P674.8 billion ($14.48 billion), lower than the P710.82 billion ($1525 billion) programmed for this year.

The mix is in favor of local financing, as it accounted for 85% of next year’s borrowing plan.

Gross domestic borrowings is set to amount to P570.23 billion ($12.23 billion), higher than the P532.68 billion ($11.43 billion) programmed for 2015.

Gross foreign borrowings is set at P104.58 billion ($2.24 billion), lower than the P178.14 billion ($3.82 billion) for 2015. – Rappler.com

$1 = P 46.5