The government increases loans in July

The national government increased its indebtedness in July to P134 billion to cover the growing budget deficit amid weak revenue collection, data from the Treasury Office showed.

The data revealed that the Duterte administration’s gross loans amounted to 134.53 billion pesos in July this year, a reversal of the government payment of 1.09 billion pesos made in the same month of 2019. account to a record of P1.856 trillion.

Of total loans in July, external financing rose to P67.69 from just P3.210 million last year. Of that amount, P63.73 billion were program loans and P3.96 billion were project loans.

Nationwide, the government also borrowed P66.84 billion, a reversal of the P4.3 billion payment a year ago. More than half of the local financing was obtained through the sale of Treasury bills for P36,860 million, while the remaining balance of P30,000 million was Treasury bonds.

By 2020, the national government plans to borrow P3 trillion from domestic and foreign creditors to finance the ceiling of the Duterte administration’s fiscal deficit of P1.815 trillion.

Amid the increased borrowing program, the national government’s outstanding debt increased by 110.1 billion pesos last month, bringing the total liabilities of all Filipinos to 9.164 trillion pesos in July this year.

The level of debt at the end of July rose from P9.054 trillion in the previous month and 17 percent more compared to P7.804 trillion in the same period last year.

According to the Treasury, government debt has already totaled P1.432 trillion since the beginning of the year, equivalent to an increase of 18.5 percent.

Of the total outstanding debt, 68.3 percent is in the hands of local financial institutions, while the remaining 31.7 percent was obtained from foreign creditors.

As of July, local debt amounted to P6.256 trillion, up 19 percent compared to P5.25 trillion last year.

On the other hand, the stock of external debt increased by 14 percent to P2.907 trillion in July from P2.553 trillion in the same month of 2019.

In 2020, the Duterte administration expects the outstanding debt to reach more than P10 trillion.