Nat’l Government gross borrowings drop in 2022

GROSS BORROWINGS by the National Government declined 16% to PHP 2.16 trillion in 2022, the Bureau of the Treasury (BTr) said.

Data from the BTr showed that total borrowings dropped 16% year on year from the PHP 2.58 trillion seen as of end-December 2021.

However, the PHP 2.16-trillion gross borrowings were below the PHP 2.2-trillion target for the year.

In December alone, total gross borrowings stood at PHP 59.43 billion, versus the net redemption of PHP 196 billion in the year prior.

During the month, local debt accounted for more than half or 55% of total gross borrowings.

Gross domestic debt stood at PHP 32.96 billion in December, a reversal of the PHP 236-billion net redemption in the same month in the previous year.

The BTr raised PHP 57.97 billion from fixed rate Treasury bonds, while Treasury bills resulted in a net redemption of PHP 25.01 billion.

Meanwhile, gross external borrowings in December fell 33.6% to PHP 26.48 billion. This consisted entirely of new project loans.

For the full year, the bulk came from domestic sources, which accounted for over three-fourths or 76% of gross borrowings.

Local gross borrowings declined by 18% to PHP 1.64 trillion in 2022 from PHP 2.01 trillion in the previous year.

Broken down, this consisted of PHP 834.48 billion worth of retail Treasury bonds and PHP 1.19 trillion worth of fixed-rate Treasury bonds. It also included a net redemption of Treasury bills worth PHP 385.8 billion.

Meanwhile, external gross borrowings reached PHP 520.9 billion, 8.4% lower than the PHP 568.67 billion in 2021.

This includes PHP 120.68 billion in new project loans and PHP 136.6 billion in program loans.

It also consisted of global bonds and Samurai bonds, which raised PHP 234.26 billion and PHP 28.55 billion, respectively.

The government borrows from foreign and domestic sources to close its widening fiscal deficit.

In 2022, the budget gap was at PHP 1.61 trillion, bringing the fiscal deficit to 7.33% of gross domestic product (GDP). This was higher than the government’s 6.9% target.

This year, the government plans to borrow PHP 2.207 trillion to fund a budget deficit capped at 6.1% of GDP.

Of the total, 75% or PHP 1.654 trillion will be sourced domestically. The remaining PHP 553.5 billion will be borrowed from external sources. — L.M.J.C.Jocson