GROSS borrowings by the national government grew by three-fourths in July due to a swollen budget deficit that required additional funding from local and foreign financiers.
The government borrowed P291.375 billion in July, an increase of 75.41 percent from P166.107 billion in the same month last year, latest data from the Bureau of the Treasury showed.
During the month, both domestic and external borrowings surged to plug the P106.263-billion budget deficit, which expanded by more than fivefold as the money spent by the government outpaced the revenues it collected.
Domestic borrowings jumped by 77.86 percent to P271.321 billion in July from P152.540 billion a year earlier. Some P138.121 billion was borrowed through fixed-rate Treasury bonds (T-bonds), while P133.2 billion was through net Treasury bills (T-bills).
On the other hand, external borrowings rose by 47.81 percent year-on-year to P20.054 billion from P13.567 billion.
Sources of foreign borrowings include program loans worth P1.413 billion and project loans amounting to P18.641 billion.
From January to July this year, gross borrowings totaled P2.112 trillion, up by 20.21 percent from P1.757 trillion in the same period in the previous year.
This already makes up 77.27 percent of the government’s borrowing target of P2.733 trillion for the year. Of the amount, P1.918 trillion will come from local lenders, while P815.505 billion will be sourced from foreign financiers.
Broken down, seven-month domestic borrowings grew by 15.37 percent year-on-year to P1.547 trillion from P1.341 trillion. This comprised P133.2 billion in net T-bills and P138.121 billion in T-bonds.
Offshore borrowings likewise climbed by 35.80 percent to P564.856 billion as of end-July from P415.918 billion a year ago.
The government has borrowed P92.878 billion in project loans and P157.607 billion in program loans from multilateral development banks, including the Asian Development Bank and World Bank, among others.
About P314.371 billion was also raised by the Treasury through the issuance of triple-tenor US dollar bonds in January and another foray in June.-July budget deficit widened to P893.077 billion after expenditures of P3.763 trillion outpaced revenue collections of P2.870 trillion.
The government projects the budget deficit to reach P1.658 trillion, or 5.4 percent of gross domestic product, this year, and P1.694 trillion, or 5.1 percent of GDP, in 2027.
Last week, the Monetary Board, the highest policy-making body of the Bangko Sentral ng Pilipinas (BSP), raised its key interest rate by 25 basis points, bringing the Target Reverse Repurchase Rate to 5 percent and the interest rates on the overnight deposit and lending facilities to 4.5 percent and 5.5 percent, respectively.
BSP Governor Eli M. Remolona Jr. acknowledged that the move will make borrowing costs more expensive for the government and further squeeze the fiscal space.
For this year, the government has allotted a total of P2.045 trillion for debt servicing, which includes interest payments and debt amortization. Interest payments alone would account for 15.47 percent of next year’s proposed P7.2-trillion national budget.
The government programmed its gross borrowings for next year at P3.304 trillion, of which P2.389 trillion will be sourced locally, while P925.12 billion will come from foreign lenders.
Outstanding debt of the national government is projected to swell to P19.765 trillion at the end of 2026 and P21.479 trillion at the end of 2027.