GROSS borrowings by the national government hit P2.27 trillion as of July this year, surging by over a fifth from a year ago as the state needed more money to finance higher spending requirements amid the pandemic.
The government’s gross borrowings soared by 22.24 percent from P1.86 trillion in January to July last year, based on Bureau of the Treasury data.
Gross domestic borrowings in the same period ballooned to P1.83 trillion, jumping by 32.9 percent from last year’s P1.38 trillion.
On the other hand, the government relied less on foreign sources as its gross external borrowings fell by 8.2 percent to P441.74 billion from P481.15 billion as of end-July last year.
Meanwhile, gross borrowings for the month of July more than doubled to P337.15 billion from last year’s P134.53 billion.
During the period, the government borrowed more from both domestic and foreign sources at P180.36 billion and P156.79 billion, respectively. In July last year, government’s gross domestic borrowings stood at P66.84 billion while its gross foreign borrowings reached P67.7 billion.
The bulk of the gross domestic borrowings in July this year came from Fixed Rate Treasury Bonds at P208.86 billion. However, this was offset by the net issuance of Treasury Bills at P28.5 billion, which meant that there were more debt repayments than the issuance of the debt papers during the month.
Most of the gross foreign borrowings in July were raised through the sale of global bonds at P146.17 billion. Meanwhile, the remaining P10.6 billion came from a project loan.
As of end-July, the national government’s outstanding debt has reached a new high of P11.61 trillion, soaring by 26.7 percent from P9.16 trillion a year ago.
The national government expects its outstanding debt this year to balloon to P11.73 trillion, up by 19.8 percent from P9.795 trillion in 2020. This is also projected to further swell in 2022 to P13.42 trillion.
For this year, the national government has set a P3.1-trillion borrowing program, of which around 75 percent is expected to be raised through domestic sources.
The country’s debt-to-GDP ratio already stood at 60.4 percent as of end-June this year.
Finance Secretary Carlos G. Dominguez III earlier said the country’s debt-to-GDP ratio is projected to rise to 59.1 percent this year and peak next year at 60.8 percent—slightly above the internationally accepted threshold—before gradually tapering off to 60.7 percent and 59.7 percent in 2023 and 2024.
The Department of Finance sees the national government returning to its pre-pandemic debt and budget deficit levels as early as 2024 or by 2025 if the recommended fiscal measures are passed early by the next administration and if the economy quickly recovers.