National Gov’t gross borrowings up 28% in April

THE National Government’s gross borrowings rose 28.3% in April, the Bureau of the Treasury (BTr) said.

The BTr reported gross borrowings of P129.9 billion in April, against P101.26 billion in the same month a year earlier.

Month on month, gross borrowings declined 45.3%.

In April, domestic debt accounted for 74% of government borrowings.

Gross domestic borrowings increased 44.8% year on year to P96.127 billion during the month.

The BTr raised P94.475 billion from fixed-rate Treasury bonds and P1.652 billion from Treasury bills.

Meanwhile, external borrowings slipped 3.2% year on year to P33.779 billion in April.

This consisted of P27.566 billion in program loans and P6.213 billion in new project loans.

In the four months to April, gross borrowings stood at P1.11 trillion, down 5.9% from a year earlier.

Gross domestic debt fell 14.7% to P780.785 billion in the first four months.

External gross borrowings rose 22.8% year on year to P328.883 billion.

Rizal Commercial Banking Corp.’s Chief Economist Michael L. Ricafort said inflation drove the rise in gross borrowings during the month.

“Higher prices also increased the government’s expenditures and the (need to borrow),” he said in a Viber message.

Headline inflation eased to 6.1% in May, bringing the five-month inflation average to 7.5%. 

This is still above the central bank’s 2-4% target and 5.5% full-year inflation forecast.

“Higher interest rates that increased financing costs may have also contributed to higher borrowing requirements, as well as the weaker peso,” he added.

The Monetary Board paused its aggressive tightening cycle after hiking for nine straight meetings. Since May last year, the Bangko Sentral ng Pilipinas has raised key interest rates by 425 basis points to 6.25%.

“Going forward, government borrowings will be a function of the budget deficits to be financed, as well as the easing trend in inflation and eventually interest rates,” Mr. Ricafort added.

This year, the government plans to borrow P2.207 trillion. This consists of P1.654 trillion from domestic sources and P553.5 billion from external sources. — Luisa Maria Jacinta C. Jocson