Gross borrowings down 25% in July

The National Government (NG) gross borrowings fell by 25% in July amid a decline in domestic debt, data from the Bureau of the Treasury (BTr) showed.    

In July, gross borrowings dropped by a fourth to PHP 131.937 billion from PHP 174.951 billion in the same month a year ago.

Month on month, gross borrowings slid by 20.8% from PHP 166.487 billion in June.

Domestic debt accounted for the bulk or 83.75% of total gross borrowings in July.

Gross domestic borrowings fell by 34.2% to PHP 110.498 billion during the month from PHP 167.81 billion a year ago.

Broken down, domestic debt was made up of PHP 108.379 billion in fixed-rate Treasury bonds and PHP 2.119 billion in Treasury bills.

Meanwhile, external gross borrowings, mostly composed of new project loans, more than tripled to PHP 21.439 billion from PHP 7.141 billion.

For the first seven months of 2023, gross borrowings jumped by 24.8% to PHP 1.55 trillion from PHP 1.25 trillion a year ago.

Gross domestic debt stood at PHP 1.17 trillion in the January-to-July period, up by 28.4% from PHP 909.073 billion a year earlier.

This accounted for 75.5% of total gross borrowings in the first seven months.

Domestic debt during the seven-month period was composed of PHP 794.529 billion in fixed-rate Treasury bonds, PHP 283.763 billion in retail Treasury bonds, and PHP 88.703 billion in Treasury bills.

External debt went up by 15.3% to PHP 387.88 billion as of end-July from PHP 336.477 billion a year ago.

This consisted of PHP 163.607 billion in global bonds, PHP 145.059 billion in program loans, and PHP 79.214 billion in new project loans.

“The decrease in gross borrowings could be attributed to relatively lower amount of maturing government bonds/debt during the month,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The narrower budget deficit in July reflected higher government revenue collections, which meant less borrowings were needed, he added.

The National Government’s fiscal deficit shrank by 44.89% to PHP 47.8 billion in July. For the first seven months of the year, the budget gap narrowed by 21.22% to PHP 599.5 billion.

Mr. Ricafort said risk factors like elevated inflation and high interest rates could drive up borrowings.

The National Government has set its borrowing program at PHP 2.207 trillion this year, consisting of PHP 1.654 trillion from domestic sources and PHP 553.5 billion from foreign creditors. — Luisa Maria Jacinta C. Jocson