Government’s gross borrowings from January to October has breached the all-time-high nominal P3-trillion borrowing program this year, data from the Bureau of the Treasury (BTr) showed.
For the 10-month period this year—a period that more or less spans the months of Covid-19-induced lockdowns—gross borrowings amounted to P3.22 trillion, more than three times as much as the P967.556 billion posted in the same period last year.
However, National Treasurer Rosalia V. De Leon was quick to clarify that the government has not yet breached the P3-trillion borrowing program since they have already paid some of it.
“We did not breach since gross [borrowings] counted P300-billion BSP [Bangko Sentral ng Pilipinas] advances, which we paid already, and P80 billion plus from switch program,” De Leon said in a message to BusinessMirror.
Sought to clarify how much is the government’s gross borrowings as of end-October, De Leon said it is P2.8 trillion.
Nonetheless, the BTr data showed the bulk of P3.22-trillion gross borrowings were sourced locally.
Gross domestic borrowings have risen nearly four-fold to P2.65 trillion during the January to October period this year compared to last year’s P673.805 billion.
The government was able to borrow mostly from the local debt market through short-term borrowings from BSP (P840 billion), Retail Treasury Bonds (P827.107 billion), Fixed Rate Treasury Bonds (P561.907 billion) and Treasury Bills (P420.309 billion).
On the other hand, gross foreign borrowings for the same period almost doubled to P574.435 billion from last year’s P293.751 billion.
The government borrowed money from foreign lenders through program loans (P364.642 billion), global bonds (P118.735 billion), Euro bonds (P67.329 billion), and project loan (P23.729 billion).
Government’s gross borrowings for the month of October also jumped more than 13-fold to P663.212 billion from P50.273 billion posted in the same month a year ago.
Broken down, gross domestic borrowings for the same period surged to P639.043 billion, equivalent to more than 13 times as much as P47.528 billion in October 2019.
Meanwhile, gross foreign borrowings for October this year grew nearly ninefold to P24.169 billion from P2.745 billion in the same month last year.
Given the revenue hit, the government ramped up its borrowing program from P1.4 trillion to P3 trillion this year to cover the expected doubling of the budget deficit as well as to fund its spending requirements for the Covid-19 response. For next year, the government is also set to borrow another P3 trillion.
The government has also yet to release the data on the national government’s outstanding debt as of end-October but as of end-September, the country’s debt stock soared 18.5 percent to P9.37 trillion from P7.9 trillion as of end-September 2019.
By the end of this year, the national government expects its outstanding debt to reach P10.16 trillion, up by 31.42 percent from last year’s amount.
The Development Budget Coordination Committee (DBCC) earlier said it expects the country’s debt-to-GDP ratio this year to increase to 53.91 percent of gross domestic product—a level it has not seen in over a decade—from a record low of 39.6 percent of GDP last year.
As revenue collections are down amid the pandemic, the DBCC projects the country’s budget deficit to more than double to 9.6 percent of GDP or P1.815 trillion from only 3.4 percent of GDP or P660.2 billion last year.