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Philippines: Government trims borrowings in Q1
MANILA, Philippines — The government trimmed its borrowings by more than a fifth in the first quarter, but is near to breach half of the program for the year with nine months to go.
According to the Bureau of the Treasury, gross borrowings slipped by 22 percent to P1.08 trillion in the first quarter from P1.38 trillion a year ago, on a double-digit decline in domestic financing.
However, the borrowing volume in the first quarter amounted to 44 percent of the 2022 program worth P2.47 trillion, leaving the Duterte administration and its successor with a financing space of just P1.39 trillion for the remaining three quarters.
Domestic borrowings decreased by 35 percent to P849.12 billion from P1.3 trillion on a yearly basis. On the other hand, external financing nearly tripled to P233.02 billion from P79.45 billion.
For the domestic account, the government raised P457.7 billion from the sale of five-year Retail Treasury bonds (RTBs) in February. Unlike the usual Treasury bills (T-bills) and Treasury bonds (T-bonds), RTBs can be bought by small investors for as low as P5,000 per bid.
Further, the government in January received its short-term borrowings from the Bangko Sentral ng Pilipinas totaling P300 billion, an amount chopped from the previous P540 billion in liquidity support taken from the central bank.
Based on records, the government also borrowed P230.86 billion through the issuance of fixed-rate T-bonds, but made a net payment of P139.54 billion to investors who bought T-bills.
External borrowings almost tripled in the first quarter after the government took in new project and program loans and returned to the debt market abroad.
According to the Treasury, global bonds accounted for half of the foreign borrowings at P117.33 billion. Program and project loans secured from international partners made up the other half at P89.09 billion and P26.62 billion, respectively.
In March the Philippines marked its return to the offshore debt market for the year, issuing $2.25 billion in five-year and 10-year global bonds, and 25-year green bonds. The government rushed to the capital market overseas before borrowing costs went up as a result of the Fed hikes.
For the year, the government intends to borrow a total of P2.47 trillion, of which P1.91 trillion will come from domestic investors and P560.58 billion will originate from foreign lenders.
The government cut its borrowings by six percent to P2.58 trillion last year, from P2.74 trillion in 2020, after paying off some of its debts, especially the P500 billion from the central bank, before 2021 ended.
Source: https://www.philstar.com/business/2022/05/09/2179645/government-trims-borrowings-q1