PH government cuts P1T borrowing

The national government cut borrowing by around 1 trillion pesos in late August due to lower funding from domestic and foreign creditors, figures from the Office of the Treasury (BTr) showed on Sunday.

The Treasury office released the report after the national government’s total debt stood at 13.021 billion pesos in August, an increase of 12% or 1.379 billion pesos from 11.642 billion pesos a year ago. one year old.

According to BTr data, the government had borrowed a total of 1.041 billion pesos from local creditors in August, compared to 1.929 billion pesos in July.

Domestic borrowing was mainly achieved through the sale of treasury bonds and treasury bills, two types of government securities.

Moreover, the amount borrowed abroad fell by 26% in the first eight months, from 458.51 billion pesos to 337.79 billion pesos.

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Program loans reached 136.6 billion pesos at the end of August, while project loans were 55.31 billion pesos.

Through the issuance of Global Bonds and Samurai Bonds of 28.55 billion pesos, the government also raised 117.32 billion pesos in funding.

The government borrowed 133.33 billion pesos in August alone, up 13 percent from 117.56 billion pesos in the corresponding month last year.

Of this sum, the government borrowed 132.2 billion pesos on the domestic market and 1.32 billion pesos abroad.

Finance Secretary Benjamin Diokno mentioned last week that the Marcos administration would need to borrow more than 1 trillion pesos to cover the projected budget shortfall next year.

During the House of Representatives budget briefings, Diokno said “total revenue projections in 2023 are P3.6 trillion” against a proposed budget of P5.268 trillion.

The finance chief said “the planned expenditure is 5.1 trillion pesos and there will be a deficit of 1.16 trillion pesos.”

Diokno also assured that the projected budget deficit would be financed by new borrowing.

“We need to finance [through borrowings]. We will rely heavily on domestic sources so that there are no currency risks,” the finance chief said.

He said 75% of borrowing would come from local sources, while 25% would come from foreign sources.

Despite the expected amount of borrowing next year, the CFO said that “our [borrowing needs] will decrease significantly because I don’t think we will have another pandemic in the near future. »

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