In the first five months of the year, the national government’s gross financing has already surpassed 900 billion pesos, according to data from the Bureau of the Treasury released over the weekend.
Actual gross financing for the period January to May 2022 was 924.42 billion pesos, down 47.5% from 1.76 trillion pesos for the corresponding period in 2021.
In the five months ended May, domestic funding fell 57.35 percent to 644.81 billion pesos from 1.51 trillion pesos a year ago. To raise money from domestic sources, 457.79 billion pesos of retail treasury bonds and 446.44 billion pesos of fixed-rate bonds were issued.
Over the five-month period, external financing increased by 11.38 percent to 279.61 billion pesos from 251.03 billion pesos a year earlier.
The total included project loans of 44.66 billion pesos, program loans of 89.07 billion pesos, global bonds totaling 117.32 billion pesos and Samurai bonds of about 28.55 billion pesos.
Actual gross financing for all of 2021 was 2.57 trillion pesos, down 5.90 percent from 2.74 trillion pesos in 2020.
The national government has set a gross financing ceiling of 2.74 trillion pesos for this fiscal year, according to the Department of Budget and Management’s Budget of Expenditures and Funding Sources for FY2022. The amount of external funding was set at 560.57 pesos. billion, and domestic funding was pegged at 1.91 trillion pesos.
To reduce currency risks, the national government will borrow more from local lenders, Finance Minister Benjamin Diokno said earlier.
“The composition of funding, if I remember correctly, is 75-25. I think in the long term we will try to increase it to 80-20. We will take 80 percent domestically and 20 percent from foreign sources. we do this to reduce our currency risk,” he explained.
In addition, Diokno confirmed that the strategy of the national government to borrow money from abroad would be opportunistic.
“There are many sources of borrowing in terms of external debt. So, we will choose … the best terms, for example, if it is 40 years to pay correctly and at low interest rates, we would intend to borrow from these sources,” he noted.