THE government’s gross borrowings as of November has zoomed past the planned amount for 2020, latest data from the Bureau of the Treasury (BTr) showed, revealing the state’s steady path to meeting the expected debt level for the year.
The data showed that government’s gross borrowings for the 11-month period have already reached P3.048 trillion, a level that is already slightly above the all-time high nominal P3-trillion borrowing program that was set this year.
The amount is also a threefold increase from the P981.9 billion that government borrowed in the same period last year.
Nonetheless, National Treasurer Rosalia V. De Leon said the January to November report on government’s gross borrowings reflects the “proper treatment of short-term borrowing from BSP [Bangko Sentral ng Pilipinas].”
De Leon has said in her January to October report that “short-term borrowing from the BSP was reported at P840 billion gross with corresponding amortization of P300 billion, which created the notion of over borrowing.”
To recall, the end-October report showed government’s gross borrowings amounted to P3.22 trillion, more than three times as much as the P967.56 billion posted in the same period last year.
“To rectify this, BSP short-term borrowing was presented on a net basis similar to T-bills as true borrowing from BSP is only P540 billion in gross given original P300 billion repo receipts was rolled-over into promissory note within the year,” De Leon told the BusinessMirror. “This treatment is consistent with what is prescribed by government financial statistics manual for short-term borrowing.”
The data showed the government borrowed mostly from the local debt market, prompting the gross domestic borrowings to rise to P2.46 trillion during the January to November period, equivalent to more than three times as much as last year’s P681.87 billion.
Broken down, the government borrowed locally through retail Treasury bonds (P827.1 billion), fixed-rate treasury bonds (P631.74 billion), short-term borrowings from BSP (P540 billion) and Treasury bills (P465.3 billion). Gross foreign borrowings of the government during the January to November period nearly doubled to P583.64 billion from only P300.04 billion in 2019.
The state borrowed money from foreign lenders through program loans (P364.64 billion), global bonds (P118.74 billion), Euro bonds (P67.33 billion) and project loans (P32.93 billion). For November, the state’s gross borrowings skedaddled to P124.04 billion, an eightfold increase from only P14.346 billion in the same month a year ago.
Gross domestic borrowings for the same period also jumped 14-fold to P114.84 billion from only P8.06 billion in November 2019.
Meanwhile, gross foreign borrowings for November this year grew 46.4 percent to P9.2 billion from only P6.29 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 state spending requirements for its Covid-19 response. For next year, the government is also set to borrow another P3 trillion.
The government has yet to release the data on its outstanding debt as of end-November.
Nonetheless, the country’s debt stock as of end-October has already breached the P10-trillion mark, inching closer to the level expected by the government by yearend.
Data from the BTr showed the national government’s debt stock amounted to P10.028 trillion, just P100-billion shy of the P10.16-trillion outstanding debt level that economic managers had projected for this year. The government’s expected level of outstanding debt for this year is higher by 31.42 percent from P7.73 trillion as of end-2019.
The Development Budget Coordination Committee 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 hasn’t seen in over a decade—from a record low of 39.6 percent of GDP last year.