Debt payments, borrowings up

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    The government’s gross borrowings in January significantly rose from the same period last year, predominantly due to the P540 billion provisional advances availed by the national government from the Bangko Sentral ng Pilipinas (BSP) for budgetary support.

    Data posted by the Bureau of the Treasury (BTr) on its website showed the government’s gross financing in 2021 reached P710.32 billion, 574.43 percent up from the year ago level of P105.32 billion.

    Gross domestic borrowings accounted for a large chunk of the amount with P680.76 billion, jumping from the previous year’s level of P41.17 billion.

    Of the said amount, P540 billion was accounted for by the re-availment of the short-term loan facility from the BSP.

    This is the second time the BSP has extended a P540 billion provisional advance to the government, with the first one approved in October last year.

    Considered as the lender of last resort, the BSP may make direct provisional advances with or without interest to the national government to finance expenditures authorized in its annual appropriation, pursuant to Section 89 of Republic Act No. 7653 or the New Central Bank Act.

    At the onset of the lockdown measures imposed in March 2020 to combat the coronavirus pandemic, the BSP also lent P300 billion to the national government under a repurchase agreement.

    Of the domestic borrowings in January, P90 billion was in the form of fixed-rate treasury bonds while P50.79 billion was from the issuance of treasury bills.

    On the other hand, the BTr data showed that gross external borrowings for the period declined by 53.93 percent to P29.56 billion from P64.16 billion a year ago.

    Project loans totaled to P10.48 billion while the remaining P19 billion was from program loans.

    Meanwhile, the national government’s debt payments rose by 50.49 percent in January, as the debt settled went up to P219.8 billion from the P146.05 billion paid out in the same period in 2020.

    Principal payments rose by 104.13 percent to P172.77 billion from the P84.64 billion paid out in the same period a year ago.

    Of the total amortization made during the period, P49.89 billion was used to pay local lenders while P122.88 billion was spent to settle foreign obligations.

    Interest payments in January totaled to P47.02 billion, 23.43 percent lower than the P61.42 billion paid out in the previous year.

    Of the said amount, P29.34 billion was paid to domestic creditors while P17.65 billion was for international debt.

    The Department of Finance earlier said the lower interest payments was mainly due to the redemption of global bonds in 2020 and the settlement of premiums on reissued treasury bonds. – Angela Celis