NG borrowings up by a third

Business World

BORROWINGS by the national government (NG) rose by more than a third in the 10 months to October on higher issuance of securities and a dollar bond swap, data the Bureau of Treasury released on Wednesday showed.

Gross borrowings for the period rose to P701.70 billion, 34.64% more than the P521.16 billion recorded a year ago.

External borrowings hit P243.96 billion, up 6.25% from P229.59 billion a year ago, due mainly to the dollar bond swap conducted late in September. The Philippines floated P123.58 billion worth of new bonds while redeeming P105.78 billion in old ones.

Project loans, which require counterpart funding from the government, hit P22.17 billion, 23.71% more than last year’s P17.92 billion. Project loans came from multilateral and other foreign lenders like the Asian Development Bank, International Bank for Reconstruction and Development, International Fund for Agricultural Development, German development bank Kreditanstalt fur Wiederaufbau, Japan Bank for International Cooperation and the Overseas Economic Cooperation Fund.

Domestic borrowings, on the other hand, increased by a faster 56.98% to P457.73 billion from last year’s P291.57 billion.

Contributing most to the increase was a rise in Treasury bond issuance, which hit P407.13 billion in the 10-month period, 34.92% more than the P301.75 billion issued a year ago.

There was, however, a net redemption of short-term Treasury bills, which means that the government redeemed more papers than it issued during the period. It redeemed a total of P463.74 billion in T-bonds from January to October, while floating P394.54 billion.

National Treasurer Roberto B. Tan said borrowings may increase in the last two months of the year with the planned domestic bond swap, which has been approved by President Benigno S.C. Aquino III. "New bonds will be issued just like the global bond exchange," Mr. Tan said via text. -- PPM