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Government lending surpassed the P2 trillion mark in August this year as the Duterte administration needed funds to close the gap between its dwindling revenue and the level of spending required amid the coronavirus-induced recession.
Data from the Treasury Office showed that total government funding soared 202 percent in January to August this year to P2.469 trillion from P816.27 trillion in the same period last year.
Most of the loans were obtained from the local market with P1.96 trillion, made up of P827.12 billion of retail treasury bonds, P447.8 billion of long-term notes, P385 billion of Treasury bills and a P300 million loan from central bank.
Domestic funding at the end of August was 263 percent higher than the P540.72 billion the previous year.
The government also borrowed P509.7 billion from foreign creditors in the first eight months of the year, an increase of 85 percent compared to P275.55 billion a year ago.
Of the total offshore loans, P306.53 billion were obtained through program loans, while P118.73 billion was proceeds from the sale of global bonds and P67.33 billion from euro debt markets.
The government also borrowed P17.09 billion in project loans during the period.
In August alone, the national government borrowed P612.910 million from domestic and foreign creditors, 701 percent more compared to P76.520 million in the same month of 2019.
Last month, local funding stood at P584.37 billion, an increase of 1.869 percent from just P29.67 billion a year ago. Most were retail treasury bonds at P516 billion, followed by short-term debt notes at P38.03 billion and bonds at P30 billion.
On the other hand, external indebtedness in August decreased by 39 percent to P28.54 billion from P46.85. billion in the previous year. There was a release of P26.5 billion in program loans and P2.04 billion in project loans.
By 2020, the national government plans to borrow P3 trillion from domestic and foreign creditors to finance the Duterte administration’s fiscal deficit ceiling of P1.815 trillion.
But Finance Secretary Carlos G. Domínguez III said last week that the government could still borrow less than scheduled for the rest of the year if the government’s two main tax agencies continue to exceed their reduced collection targets.
While the Internal Revenue Office (BIR) and the Customs Office were about 12 percent below their collections last year through August, Domínguez noted that the two agencies have recently shown “positive developments.”
DOF data showed that the BIR and Customs have collected P1.527 trillion from January to August this year, above their revised collection target of P1.636 trillion by 7.2 percent, but below the P1.863 trillion from last year.
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