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THE NATIONAL Government’s (NG) total borrowings diminished by 65% in September, illustrating a reduction in public expenditure.
The most recent statistics from the Treasury revealed that overall total borrowings decreased by 64.89% to P128.913 billion in September from P367.183 billion during the same month last year.
On a month-to-month basis, total borrowings dropped by 74.65% from P508.527 billion in August.
Local borrowings, which constituted 93.51% of the total, declined by 16.98% to P120.548 billion in September from P145.2 billion in the corresponding month a year prior.
This was comprised of P111.848 billion in fixed-rate Treasury bonds (T-bonds) and P8.7 billion in Treasury bills (T-bills).
Foreign borrowings, which primarily consisted of project loans, plummeted by 96.23% to P8.365 billion in September from P221.983 billion the previous year.
“This (decrease in gross borrowings) significantly reflects the reduced proportion of foreign borrowings in the overall borrowing mix of the government and may also indicate the caution of certain private sector borrowers by minimizing US dollar-denominated and other foreign borrowings due to the foreign exchange risks involved,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort mentioned in a Viber message.
The peso concluded at P58.196 per dollar on Sept. 30, down by 35.1 centavos from its P57.845 closing on Dec. 27, 2024.
“(The) reduced volume of sanctioned foreign loans indicated this prudence concerning possible forex (foreign exchange) losses that accompany US dollars and other foreign loans,” Mr. Ricafort stated.
Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera conveyed in a Viber message that the decreased borrowing reflected a slowdown in government expenditure, especially on infrastructure, and the government’s “intentional recalibration of financing strategy” for the fourth quarter.
“While this reduction in borrowings can alleviate immediate stress on yields and debt servicing expenses, it also raises two concerns, such as if the fundamental budget deficit remains significant or increases further, the NG may need to escalate borrowings potentially at less favorable terms,” Mr. Rivera remarked.
The NG’s total borrowings amounted to P2.4 trillion in the January-to-September timeframe, rising by 4.11% from P2.3 trillion the previous year. This constituted 92.11% of the revised P2.6-trillion financing plan for 2025.
Domestic debt increased by 9.16% to P1.96 trillion in the period ending September from P1.795 trillion a year ago. This accounted for 92.83% of the P2.04-trillion domestic borrowing program this year.
In detail, domestic debt comprised P1.05 trillion in fixed-rate Treasury bonds, P425.61 billion in retail Treasury bonds, P300 billion in fixed-rate Treasury notes, and P181.15 billion in T-bills.
At the end of September, total external debt stood at P434.597 billion, down by 13.84% from P504.447 billion a year earlier. This represented 89.03% of the P488.174-billion external borrowing program for this year.
In detail, foreign debt was made up of P191.965 billion in global bonds, P171.307 billion in program loans, and P71.325 billion in project loans.
External borrowings as of end-September were enhanced by the global bond issuance that generated $3.3 billion or P192 billion in late January but settled in February. — Aaron Michael C. Sy
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