THE Philippine government’s gross borrowings have surged past P1.7 trillion for the first half of the year as it continues to stockpile more funds for budgetary support while there is still no clear end in sight to the Covid-19 pandemic.
Latest data from the Bureau of the Treasury showed the state’s gross borrowings for the first semester this year doubled to P1.723 trillion from only P840.837 billion recorded in the same period a year ago. It was in end-May when the government breached the P1.4-trillion borrowing program it set for the entire year prior to the Covid-19 pandemic.
The rise in gross borrowings also comes at a time that the government is expecting the budget deficit to widen to 8.4 percent of GDP or P1.613 trillion—equivalent to more than double the P660.2 billion or 3.4 percent of GDP it posted last year. A budget deficit occurs when expenditures exceed revenues.
Of the total gross borrowings as of end-June, nearly 76 percent was sourced locally while the remaining 24 percent came from foreign sources. Gross domestic borrowings for the six-month period have soared to P1.309 trillion, growing twofold from only P615.36 billion a year ago.
On the other hand, gross foreign borrowings swelled by 83.37 percent to P413.46 billion from P225.48 billion in 2019.
Broken down, domestic borrowings include fixed-rate Treasury Bonds (P387.859 billion), Retail Treasury Bonds (P310.766 billion), Treasury Bills (P310.427 billion), and domestic loan under the repurchase agreement with Bangko Sentral ng Pilipinas (P300 billion).
Meanwhile, external borrowings of the national government comprised program loans (P216.301 billion), dollar-denominated global bonds (P118.735 billion), euro bonds (P67.329 billion) and project loans (P11.092 billion).
June data
For June alone, gross borrowings nearly quadrupled to P213.23 billion from P53.709 billion in the same month a year ago.
Both domestic and foreign borrowings jumped by almost four times in June this year to P156.410 billion from last year’s P39.344 billion and to P56.817 billion from P14.365 billion in the same month a year ago, respectively.
As of end-June, the national government’s outstanding debt had breached the P9-trillion mark from P7.869 trillion in the same period in 2019.
The country’s debt-to-GDP ratio, used to gauge a country’s ability to pay its debt, is also seen by the government’s economic managers to increase to 49.8 percent by year-end from a record-low 39.6 percent last year.
Despite the projected increase in the country’s debt-to-GDP ratio, the government has said this is still far lower than the most recent peak of 71.6 percent in 2004.
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