Gov’t raises borrowing program to PHP 2.57 trillion

The National Government (NG) is looking to borrow PHP 2.57 trillion this year, mostly from the domestic market, the Department of Finance (DoF) said on Monday.

In a statement, the DoF said this is 5% higher than its original P2.46-trillion program.

National Treasurer Sharon P. Almanza said the revised borrowing plan was the result of the adjustment in the budget deficit ceiling during the Development Budget Coordination Committee (DBCC) meeting earlier this month.

Finance Secretary Ralph G. Recto said the borrowing plan was revised to reflect the changes to the fiscal program made by the DBCC.

“Based on the new DBCC forecast, a lower gross domestic product (GDP) will result in lower revenues,” he said in a Viber message to reporters.

At its meeting earlier this month, the DBCC lowered its GDP growth target to 6-7% this year from 6.5-7.5%.

The DBCC also raised the deficit ceiling to PHP 1.48 trillion this year from PHP 1.39 trillion. Revenues are projected to reach PHP 4.27 trillion, while disbursements are seen to hit PHP 5.75 trillion.

The DBCC expects the deficit as a share of GDP to settle at 5.6% this year, slightly higher than 5.1% earlier.

Mr. Recto noted that if the government’s revenue performance turns out better than expected, there might be no need for additional borrowings.

“I plan to meet both the Bureau of Internal Revenue (BIR) and Bureau of Customs (BoC) soon to discuss revenue targets. If they hit revenue targets, then we do not need additional borrowings,” he added.

For this year, the BIR is expected to generate PHP 3.055 trillion in revenues, while Customs is targeting to collect PHP 959 billion.

Under the government’s financing program, 75% of the government’s borrowings will come from domestic sources. This is equivalent to about PHP 1.9 trillion out of the PHP 2.57-trillion total.

The remaining 25% or about PHP 640 billion will come from foreign sources.

The Finance department said its financing program would “allow the country to effectively mitigate foreign exchange risks, take advantage of ample liquidity in the country’s financial system, and support the development of the local debt and capital markets.”

Latest data from the Bureau of the Treasury showed that gross borrowings declined by 12.4% to PHP 830.389 billion in the first quarter from PHP 948.09 billion a year ago. — Luisa Maria Jacinta C. Jocson