Gross borrowings plunge in February

THE National Government’s gross borrowings stood at P53.912 billion in February, plunging 89% from P479.23 billion a year ago when the Treasury sold retail Treasury bonds (RTB).

Latest data from the Bureau of the Treasury (BTr) showed the borrowings in February were 92.41% lower than the P710.32 billion raised in January when the Treasury renewed its P540-billion loan with the central bank.

However, the two-month gross borrowings remained 30.73% higher at P764.229 billion against the P584.565 billion a year ago.

Broken down, domestic borrowings totaled P37.196 billion in February, 91% lower than the P405.76 billion in 2020 when the Treasury raised P311 billion via the three-year RTBs.

The annual RTB sale was held in March this year, with BTr, raising P463 billion from new funds and swap subscriptions.

Local borrowings consisted of P30 billion of Treasury bonds and P7.196 billion in Treasury bills.

The government did not make any amortization payments of its local debt.

External gross debt went down 77.25% to P16.716 billion in February from P73.484 billion a year ago. This comprised P14.34 billion in program loans from foreign lenders and P2.376 billion in project loans.

The Treasury repaid P2.131 billion of its foreign debt that month, bringing its net foreign borrowings for the month to P14.585 billion.

For the January-February period, total domestic borrowings reached P717.96 billion, up 60.64% year on year.

Gross foreign debt, meanwhile, fell 66.38% from a year ago to P46.272 billion in the two-month period.

Excluding the P125-billion redemptions made of its external obligations, the BTr recorded P639.22 billion in net borrowings in January-February.

The government is looking to raise P3 trillion this year from domestic and external lenders to help fund its budget deficit, which is seen to hit 8.9% of gross domestic product.

The government runs on a fiscal deficit as it spends more than the revenues it generates in order to boost economic growth. Since last year, the deficit cap has ballooned to multi-year highs as tax collection slumped due to the recession and state spending increased.

The BTr raised P24 billion via the sale of three-year yen-denominated Samurai bonds on March 30. Proceeds are scheduled to be settled on April 13.

Finance Secretary Carlos G. Dominguez III has said the government will soon tap the US dollar bond market before rates skyrocket.

Mr. Dominguez added the government will start winding down its debt by early next year as part of its fiscal consolidation plan. — Beatrice M. Laforga