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Philippines: Government hikes borrowings by 12% to P1.93 trillion in H1
MANILA, Philippines — The government ramped up its borrowings in the first semester to nearly P2 trillion in an effort to speed up the economy’s recovery from the impact of the pandemic.
According to the Bureau of the Treasury, the borrowings increased by more than 12 percent to P1.93 trillion in the first half, from P1.72 trillion during the same period last year.
Based on records, domestic borrowings jumped by about 26 percent to P1.64 trillion, while external financing fell by over 31 percent to P248.94 billion.
Broken down, fixed-rate Treasury bonds and short term borrowings from the Bangko Sentral ng Pilipinas accounted for nearly 68 percent at P571 billion and P540 billion, respectively. Further, the government issued P463.32 billion worth of retail T-bonds and Premyo bonds during the period.
On the other hand, euro bonds sold in April made up about 43 percent of foreign borrowings at P121.96 billion. Likewise, the government obtained P95.08 billion in program loans and P43.71 billion in project loans from January to June.
The government has now used up close to 64 percent of the P3.02 trillion borrowing plan it crafted for this year.
For June, the Treasury reported that borrowings dropped by more than 21 percent to P167.19 billion, from P213.22 billion during the same period last year.
In particular, domestic borrowings dropped by over 13 percent to P135.29 billion, while offshore financing fell by about 44 percent to P31.9 billion.
The government plans to borrow P3.02 trillion in 2021 to bankroll its pandemic efforts, especially the vaccination program. It seeks to immunize at least 70 percent of the population by the end of the year to achieve herd immunity.
At an 85:15 ratio, the government will secure the bulk of the borrowings from domestic sources at P2.58 trillion, mainly through the sale of debt papers. Another P442.36 billion will be requested from foreign lenders in the form of bonds and loans.
In turn, economic managers expect the debt-to-GDP ratio to swell to 59.1 percent this year, nearing the 60 percent international threshold.
The country’s outstanding debt as of end-June ballooned to a record P11.16 trillion from P9.05 trillion a year ago.
Source: https://www.philstar.com/business/2021/08/09/2118542/government-hikes-borrowings-12-p193-trillion-h1