State borrowings rise to P721.9B by November

Business World

BORROWINGS of the national government rose by more than a third as of November on higher issuance of government securities, data the Bureau of Treasury released last Wednesday showed.

Gross borrowings for the period rose to P721.91 billion, 33.43% more than the P541.02 billion recorded a year ago.

On a monthly basis however, state borrowings dipped to P20.21 billion last month from P29.46 billion in October, as the government cut down on offshore borrowings.

External borrowings hit P244.25 billion during the 11-month period, 2.43% higher than last year’s P238.45 billion.

But in the month of November alone, the government borrowed just P285 million from outside the country, compared to P30.13 billion in October.

External borrowings that month consisted of project loans -- or those that required government counterpart funding -- from the Asian Development Bank (P133 million), International Bank for Reconstruction and Development (P102 million), International Fund for Agricultural Development (P42 million), Japan Bank for International Cooperation and Overseas Economic Cooperation Fund (P8 million).

Project loans rose 13.61% to P22.46 billion in the 11 months to November from P19.77 billion last year.

No program loans were recorded last month.

The government also repaid some P4.549 billion worth of foreign debt in November, hence, offsetting the P285 million borrowed that month.

Local borrowings, on the other hand, rose nearly by 60% to P477.66 billion as of November from last year’s P302.57 billion.

Contributing most to the increase was a rise in Treasury bond issuance, which hit P436.27 billion from January to November, 31.73% more than the P331.16 billion floated a year ago.

There was, however, a net redemption of short-term Treasury bills, which means that the government redeemed more of these securities than it issued during the period. A total of P490.74 billion in T-bills were redeemed by the government during the 11-month period, against P412.32 billion that were floated.

In November alone, the government borrowed P19.927 billion locally, consisting of P29.142 billion in Treasury bonds and a net redemption of 9.215 billion in Treasury bills.

The government borrows domestically and externally to finance its budget deficit, programmed to hit P325 billion this year, as well as to repay existing debts.

The Aquino administration however has said it is cutting down on foreign borrowings next year to avoid foreign currency risks, even as the Bureau of Treasury said that another round of a peso global bond issue is possible in the first quarter of 2011.

As of November, the budget shortfall had been kept under control at P269.8 billion, way below the P300.2 billion programmed for that period. -- PPM