Gross borrowings jump in February

THE NATIONAL GOVERNMENT’S (NG) gross borrowings jumped to PHP 375.245 billion in February, amid a spike in domestic borrowings, the Bureau of the Treasury (BTr) said.

Data from the BTr showed that gross borrowings in February surged by 606% from PHP 53.121 billion in the same month a year ago.

Month on month, gross borrowings inched up by 2.3% from the PHP 366.863 billion recorded in January.

In February, domestic debt accounted for 95.7% of total gross borrowings.

Gross domestic borrowings increased by 698% to PHP 359.261 billion in February, from PHP 45 billion in the same month in 2022.

During the month, the BTr raised PHP 283.711 billion from retail Treasury bonds (RTBs), PHP 70 billion from fixed-rate Treasury bonds, and PHP 5.55 billion from Treasury bills.

Meanwhile, external borrowings almost doubled to PHP 15.984 billion in February from PHP 8.121 billion in the same month in 2022. External borrowings were made up solely of new project loans.

For the first two months of the year, gross borrowings jumped by 50.8% to PHP 742.108 billion, from PHP 492.251 billion in the same period a year ago.

Gross domestic debt rose by 37.9% to PHP 538.561 billion in the January-to-February period, from PHP 390.551 billion a year ago.

External gross borrowings doubled to PHP 203.547 billion in the two-month period from PHP 101.7 billion.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that the higher borrowings were mainly due to government bond offerings in February.

In February, the government raised PHP 283.711 billion from its offering of five-and-a-half-year RTBs. 

Mr. Ricafort said inflation also affected government expenditures, leading to more borrowings.

Inflation slowed to 8.6% in February from 8.7% in January.

“Higher interest rates and borrowing costs also increased the government’s debt servicing, thereby also leading to more borrowings,” Mr. Ricafort added.

The government paid PHP 47.831 billion for debt servicing in January, lower by 77.8% year on year.

For 2023, the government allocated PHP 1.6 trillion for debt payments, higher by 23.3% than last year’s PHP 1.298-trillion program.

“For the coming months, around May or in the second quarter, government borrowings could again increase in view of the upcoming dollar and/or euro-denominated retail bonds,” Mr. Ricafort said.

National Treasurer Rosalia V. de Leon earlier said that the government is looking to launch a retail dollar bond offering in May.

The offering has a target size of USD 1.5 billion for 5.5-year debt papers, Ms. De Leon said.

This year, the government plans to borrow PHP 2.207 trillion. This consists of PHP 1.654 trillion from domestic sources and PHP 553.5 billion from external sources. — By Luisa Maria Jacinta C. Jocson