Gov’t borrowings jump 700% in Aug

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    The national government’s gross borrowings in August registered a 700.9 percent hike versus the same period a year ago due to the record issuance of P516.3 billion in five-year retail treasury bonds (RTBs) during the period.

    Data posted on the Bureau of the Treasury’s (BTr) website showed that gross financing in August stood at P612.91 billion.

    In the same period a year ago, it was recorded at P76.52 billion.

    Domestic issuances posted a significant increase while external financing fell from a year ago.

    Local financing amounted to P584.37 billion, jumping from the P29.67 billion in the same period last year.

    The BTr settled the P516.3 billion in RTBs at the rate of 2.625 percent per annum on August 12.

    The total issue size of the retail offer consisted of P488.5 billion in new subscriptions and P27.8 billion more from the bond exchange program.

    The second RTB offering for 2020 was met with overwhelming demand from the investing public, with the issuance being oversubscribed by more than 10 times the planned minimum issue size of P30 billion.

    Aside from the RTBs, the government raised P38.03 billion from treasury bills and P30 billion from treasury bonds.

    Meanwhile, foreign financing fell by 39.09 percent to P28.54 billion from P46.85 billion last year.

    Program loans accounted for bulk of the amount with P26.5 billion, while project loans totaled to P2.04 billion.

    As of end-August, gross borrowings totaled to P2.47 trillion, 169.57 percent up from the P916.27 billion recorded in the same period last year.

    The government significantly increased its borrowings this year amid the need to support its coronavirus disease 2019 response, as lockdown measures implemented to minimize the spread of the virus led to limited economic activity which resulted in weaker tax revenues.

    Both external and domestic financing grew by 84.97 percent and 205.94 percent, respectively.