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Gross borrowings reach P1.46T
Gross financing of the national government has already increased in the first seven months of the year due to higher domestic borrowings. The latest data from the Bureau of Treasury (BTr) showed that the national government's gross borrowings from January to July 2023 reached P1.46 trillion. Gross borrowing is the entire sum of loans or borrowings made by the government from domestic and international sources to cover its necessary expenditures and close budget gaps. During the first seven months, gross domestic borrowings reached P1.17 trillion, while the gross external financing reached P387.88 billion. Fixed-rate treasury bonds worth P794.53 billion, retail treasury bonds worth P283.76 billion and net treasury bills worth P88.70 billion were both issued to raise funds from domestic sources. Meanwhile, project loans totaling P79.21 billion, program loans of P145.06 billion, and global bonds comprising P163.60 billion made up the entire amount of external funding. *July borrowings down* Meanwhile, the national government's July borrowings declined year-on-year, mainly due to reduced loans acquired from local creditors. Marcos administration's borrowing in July came to P131.13 billion, down from P174.21 billion during the same month last year. The decrease in borrowing from the domestic market is mainly the cause of the decline. In July 2023, gross local financing stood at P167.81 billion. However, the government's net local borrowing reached P110.5 billion this year. Out of the total, P108.4 billion came from the sale of long-term debt papers, while P2.12 billion was acquired through short-term IOU offerings. National Treasurer and Monetary Board member Rosalia de Leon previously stated that the government needs to borrow money because its spending outweighs its revenue collections. Due to this condition, a budget deficit must be solved via borrowing. But not all the money the government borrows goes toward closing the budget gap. A portion of it is used to pay off past debts, including interest. The post Gross borrowings reach P1.46T appeared first on Daily Tribune......»»
Gov’t debt servicing higher this year
Debt payments by the national government increased year-on-year in the first half of the year due to higher amortization, data from the Bureau of the Treasury (BTr) showed on Monday. The national government's debt servicing reached P907.92 billion for the January to June period this year, up from the P458.35 billion paid out in the same term last year. Principal and interest payments are referred to as debt servicing. The debt service burden does not include actual outlays like refinancing, rescheduling existing debt or turning debt into equity. Payment of principal increased to P625.47 billion from P201.14 billion in the first six months of last year. During the year's first half, principal payments consist of domestic payments amounting to P561.42 billion and offshore debt payments worth P64.05 billion. On the other hand, interest payments rose to P282.46 billion in January to June this year from P257.21 billion in 2022. Domestic interest payments reached P192.89 billion during the first half of the year, down from P205.69 billion during the same period last year. It consisted of P74.73 billion in retail Treasury bonds, P108.37 billion in fixed-rate Treasury bonds, and P6.71 billion in Treasury bills. Meanwhile, interest on foreign debt increased to P89.57 billion during the first half from P51.23 billion a year ago. *June Financing Up* In June alone, debt payments amounted to P88.4 billion, up from P44.28 billion a year ago, due to higher interest payments. Of that amount, interest and principal payments reached P52.89 billion and P35.52 billion, respectively. Rizal Commercial Banking Corp. chief economist Michael Ricafort said the rise in debt servicing during the year's first half could be attributed to higher borrowing costs amid higher interest rates locally and globally to tame inflation. "Weaker peso exchange rate since last year also increased the peso equivalent of the country's foreign debt and the debt servicing that comes along," Ricafort told DAILY TRIBUNE in a Viber message. He added that the further opening of the economy may have also increased some government spending, especially on infrastructure, thereby leading to the continued budget deficit and more gross borrowings to finance the deficit. "(This factor), in turn, led to new record high outstanding national government debt levels in recent months," Ricafort said. For context, BTr said the National Government's (NG) total outstanding debt stood at P14.15 trillion as of June 2023. Ricafort also said there is a need for government agencies to increase the utilization of government funds in view of the interest rates and other debt-servicing costs involved. The post Gov’t debt servicing higher this year appeared first on Daily Tribune......»»
Gov’t funds inflation measures with loans
Borrowings of the national government from domestic and foreign sources continued to climb as they exceeded the P1-trillion mark in the first half of the year. The loans were purportedly intended for programs to respond to the impact of high prices, mainly through subsidies to the poor. Economists expect prices of basic commodities to remain high as the holiday season approaches. Most of them agreed that the third quarter is considered a period for stockpiling inventories, while the final three months see hefty holiday spending, which both increase price pressures. Bureau of Treasury data showed that actual gross borrowing hit P1.33 trillion during the January–June period, up by 24.3 percent from P1.07 trillion a year ago. In the first half, the government borrowed three times more from domestic sources at P1.06 trillion, while gross external financing reached P366.44 billion. Domestic borrowings came from retail Treasury bonds worth P283.76 billion and fixed-rate bonds worth P686.15 billion. Foreign debts came from project loans totaling P57.76 billion, program loans of P145.06 billion, and global bonds worth an equivalent of P163.6 billion. In June alone, gross financing reached P158.95 billion, up by 14.65 percent from P138.64 billion for the same month in 2022. Gross domestic borrowings reached P143.92 billion in June 2023, a 49.22-percent increase from P96.45 billion a year ago. Broken down, domestic debts came from P125 billion in fixed-rate Treasury bonds and P18.92 billion in Treasury bills. Meanwhile, external gross borrowings declined by 54.61 percent to P22.57 billion from P49.72 billion in the previous year. This consisted of P2.66 billion in program loans and P19.9 billion in new project loans. Government borrowings are okay as long as they are used for productive purposes, according to a previous statement from the Department of Budget and Management. Budget Secretary Amenah Pangandaman earlier said the government’s debt-to-gross domestic product ratio rose at the height of the pandemic because the government had to take out additional debt to fund the health sector. “There is a deficit because you have insufficient revenues and the balance will come from borrowings. So, it’s all interconnected,” Pangandaman said in a vlog. The Development Budget Coordination Committee, or DBCC, has a target to bring down the debt-to-gross domestic product ratio to less than 60 percent by 2025. The post Gov’t funds inflation measures with loans appeared first on Daily Tribune......»»
Nat’l gov’t financing reached P1-trillion mark
The Bureau of the Treasury reported that the national government's gross financing reached P1 trillion in the first half of the year. The gross financing reached P1.33 trillion from January to June 2023, a 24.3 percent increase from the same period in the previous year when it was P1.07 trillion. During the first half, gross domestic borrowings reached P1.06 trillion, while the gross external financing reached P366.44 billion. Retail Treasury bonds worth P283.76 billion and fixed-rate bonds worth P686.15 billion were both issued to raise funds from domestic sources. Meanwhile, project loans totaling P57.76 billion, program loans of P145.06 billion, and global bonds comprising P163.60 billion made up the entire amount of external funding. In June alone, gross financing reached P158.95 billion, up by 14.65 from P138.64 billion the same month in 2022. Gross domestic borrowings reached P143.92 billion in June 2023, a 49.22 percent increase from P96.45 billion last June 2022. Broken down, this consisted of P125 billion in fixed-rate Treasury bonds and P18.92 billion in Treasury bills. Meanwhile, external gross borrowings declined by 54.61 percent to P22.57 billion from P49.72 billion in the previous year. This consisted of P2.66 billion in program loans and P19.9 billion in new project loans. Government borrowings are okay as long as they are used for productive purposes, according to a previous statement from the Department of Budget and Management (DBM). Budget Secretary Amenah Pangandaman previously said that the government's debt-to-gross domestic product (DTP) ratio rose at the height of the pandemic because the government had to take out additional debt to fund the health sector. "We are trying to lower our debt as a percentage of GDP and our deficit. There is a deficit because you have insufficient revenue and the balance will come from borrowings. So, it's all interconnected," Pangandaman said in a vlog uploaded on the official YouTube account of Senator Francis Tolentino earlier this month. The post Nat’l gov’t financing reached P1-trillion mark appeared first on Daily Tribune......»»
5-month debts breach P1T
Gross financing of the national government had reached the P1-trillion threshold in the first five months of the year due to higher domestic borrowings, data from the Bureau of the Treasury showed over the weekend. From January to May 2022, actual gross financing hit P1.17 trillion as gross domestic borrowings amounted to P912.577 billion, while external debts reached P343.874 billion. Retail Treasury bonds worth P283.763 billion and fixed-rate bonds worth P561.150 billion were both issued to raise funds from domestic sources. Project loans totaling P37.872 billion, program loans of P142.395 billion, and global bonds comprising P163.607 billion made up the entire amount of external funding. Meanwhile, the Marcos administration’s actual gross financing for May 2023 increased month-on-month by 13.13 percent to higher domestic borrowings. Higher May borrowings The same data from BTr revealed that the government’s gross borrowings in May reached P141.671 billion from April’s P125.230 billion. Local borrowings in May rose 37.10 percent month-on-month to P131.792 billion with the issuance of treasury bills worth P31.792 billion and fixed-rate treasury bonds worth P100.000 billion. Gross loans from the international donor community reached P14.991 billion, or 55.62 percent lower than P33.779 billion last month. The gross external financing is composed of project loans worth P5.893 billion and program loans worth P9.098 billion. The post 5-month debts breach P1T appeared first on Daily Tribune......»»
Gov’t financing surpasses P1-trillion mark from Jan-May
National government financing has already reached the P1-trillion threshold in the first five months of the year due to higher domestic borrowings, data from the Bureau of the Treasury showed. From January to May 2022, actual net financing hit P1.168 trillion, with net domestic borrowings amounting to P880.315 billion and net external financing reaching P287.364 billion. Retail Treasury bonds worth P283.763 billion and fixed-rate bonds worth P561.150 billion were both issued to raise funds from domestic sources. Project loans totaling P37.872 billion, program loans of P142.395 billion, and global bonds comprising P163.607 billion made up the entire amount of external funding. Meanwhile, the Marcos administration's actual financing for May 2023 increased month-on-month by 13.13 percent to higher domestic borrowings. The same data from BTr revealed that government borrowings in May reached P141.671 billion from April's P125.230 billion. Local borrowings in May rose 37.10 percent month-on-month to P131.792 billion with the issuance of treasury bills worth P31.792 billion and fixed-rate treasury bonds worth P100 billion. Gross loans from the international donor community reached P14.991 billion, or 55.62 percent lower than P33.779 billion last month. The gross external financing is composed of project loans worth P5.893 billion and program loans worth P9.098 billion. The post Gov’t financing surpasses P1-trillion mark from Jan-May appeared first on Daily Tribune......»»
BTr: April debt outlay soars 376%
Government debt service increased in April from a year ago due to higher amortization and interest rate payments, the Bureau of the Treasury reported over the weekend. Data from the BTr showed the April 2023 debt bill increased by 376.47 percent to P204.763 billion from P42.975 billion. Month-on-month, debt service payments increased by 44.03 percent from P142.171 billion in March. Of the total in April, 77.41 percent of payments went to amortization, while the remaining 22.58 percent went to interest payments. Higher amortization Amortization, also known as principal payments, for April soared year-on-year to P158.510 billion from just P5.672 billion a year ago. It also increased month-on-month from P81.273 billion in March. The BTr settled P153.959 billion with domestic lenders and P4.551 billion with foreign creditors. Meanwhile, interest payments rose by 23.99 percent to P46.253 billion in April from P37.303 billion in the same month in 2022. Broken down, interest paid on domestic debt slipped by 7.05 percent to P27.750 billion from P29.856 billion last year. Domestic debt consisted of P3.575 billion in retail Treasury bonds, P22.815 billion in fixed-rate Treasury bonds, and P901 million in Treasury bills. Interest on foreign debt increased by 148.46 percent to P18.503 billion from P7.447 billion a year ago. For the first four months, debt service payments skyrocketed by 116.05 percent to P770.479 billion from P356.625 billion a year ago. Principal repayments made up 75.56 percent of the debt service bill in the January-to-April period. Amortization payments soared by 242.5 percent to P423.739 billion in the four months from P169.993 billion last year. Total interest payments slightly increased by 0.85 percent to P188.230 billion in the first four months from P186.632 billion in the same period last year. The post BTr: April debt outlay soars 376% appeared first on Daily Tribune......»»
Losing cash while holding it
Consulting firm Manulife Investment Management or MIM has presented a financial paradox in that an investor loses money kept in the vault for too long. Investors are increasingly concerned about market risks because of factors such as the increases in US Federal Reserve interest rates, individual banking crises, and increasingly serious geopolitical risks. As a result, many investors are reluctant to invest in the market, and some even sell their stocks and bonds to minimize losses. In response, banks offer higher deposit rates to appeal to investors, who choose to hold money in the form of term deposits. MIM, however, warned in a report that holding cash may seem like a good option during periods of market volatility, but cash remains vulnerable to inflation, especially in the current macroeconomic environment. Inflation erodes the purchasing power of cash, meaning it will buy less with it in the future. A simple calculation to prove the difference between holding cash versus stocks: Between 2011 and 2021, the return on cash (as measured by the annualized return of the three-month US Treasury bill) was 0.47 percent. Adjusted for inflation, which was 2.17 percent on average during those 10 years, the return was minus 1.7 percent. Put simply, $100,000 in Treasury bills in 2011 would have had $84,243.26 of buying power 10 years later. Conversely, over the same 10-year period, a $100,000 investment in the S&P/TSX composite dividend index, the stocks benchmark in Canada, would have resulted in $200,797.37 of buying power, thanks to its inflation-adjusted annualized return of 7.22 percent. In addition, investors should also consider how real interest rates (i.e. bank deposit rates minus inflation) affect their returns. From January to February 2023, the annual nominal interest rate on three-month term deposits in most Asian countries or regions varied from 2.5 percent to 5.4 percent. Then there’s deposit rates However, when adjusted for changes in the consumer price index during the same period, the real three-month time deposit annual interest rate ranged from negative 5.2 percent to 1.09 percent. “History tells us that equities, bonds, and some income-oriented investments have the potential to deliver higher long-term returns than cash and could potentially outstrip inflation,” MIM’s report stated. From 2009 to 2022, compounded annual nominal returns for Asian equities and bonds were 8.15 percent and 4.38 percent, respectively. Real estate investment trusts in the Asia-Pacific region generated an annualized return as high as 11.38 percent. The post Losing cash while holding it appeared first on Daily Tribune......»»
Borrowings Spike 31.01%
The National Government's (NG) gross borrowings in April spiked by 31.01 percent year-on-year amid a rise in domestic borrowings, data from the Bureau of the Treasury (BTr) showed over the weekend. Data from the BTr showed that gross borrowings in April soared to P125.230 billion from P95.588 billion in the same month a year ago. However, month-on-month gross borrowings declined by 45.42 percent from the P229.432 billion recorded in January. In April, domestic debt accounted for 76.66 percent of total gross borrowings. Gross domestic borrowings increased by 0.43 percent to P96,002 billion in April, from P95.588 billion in the same month in 2022. During the month, the BTr raised none from retail Treasury bonds (RTBs), P94.475 billion from fixed-rate Treasury bonds, and P1.652 billion from Treasury bills. Meanwhile, gross external borrowings declined to P33.779 billion in April from P34.883 billion in the same month in 2022. External borrowings consisted of project loans at P6.213 billion and program loans at P27.566 billion. For the first four months of the year, gross borrowings declined by 12.16 percent to P1.026 trillion, from P1.168 trillion in the same period a year ago. Gross domestic debt declined by 13.68 percent to P780.785 billion in the January-to-April period, from P904.494 billion a year ago. Meanwhile, the external gross borrowing increased by 22.76 percent to P328.883 billion in the first four months of the year from P267.905 billion during the same period last year. The post Borrowings Spike 31.01% appeared first on Daily Tribune......»»
BTr: March debt service bill jumps to P142-B
The National Government’s debt service bill surged year-on-year in March due to significantly higher amortization payments, the Bureau of the Treasury (BTr) reported over the weekend. Data from the BTr showed the March 2023 debt service bill skyrocketed by 110.970 percent to P142.171 billion from P67.389 billion in the same month a year ago. However, debt payments month-on-month declined by 62.160 percent from P375.714 in February. Of the total debt service bill in February, the bulk – or 57.166 percent – went to amortization, while the remaining 42.834 percent went to interest payments. Amortization, also known as principal payments, for March, soared year-on-year to P81.273 billion from just P11.841 billion a year ago. But it declined month-on-month from P341.605 billion in February. Payments for domestic debt skyrocketed to P73.361 billion in March from P4.312 billion a year ago but declined month-on-month from P341.605 billion in February. Amortization on foreign obligations rose to P7.912 billion in March from P7.529 billion in the previous year but declined from P38.144 billion in February. Principal payments in March consisted of P73.103 billion in Bond Sinking Fund (BSF) and P258 million in Auction Rate Bond (ARB). Interest payments up in March Meanwhile, interest payments rose to P60.898 billion in March from P55.548 billion a year ago. Month on month, interest payments increased from P34.109 billion in February. Broken down, interest on local debt decreased year-on-year to P46.754 billion in March from P47.332 billion a year ago. Domestic interest payments in March consisted of P19.671 billion in fixed-rate Treasury bonds, P25.620 billion in retail Treasury bonds, P1.435 billion in Treasury bills, and other payments worth P28 million. Interest on foreign debt surged year-on-year to P14.144 billion in March from P8.216 billion a year ago and month-on-month from P12.185 billion in February. The post BTr: March debt service bill jumps to P142-B appeared first on Daily Tribune......»»
US averts first-ever default with 11th-hour debt deal
US senators voted to suspend the federal debt limit Thursday, capping weeks of fraught negotiations to eliminate the threat of a disastrous credit default just four days ahead of the deadline set by the Treasury. Economists had warned the country could run out of money to pay its bills by Monday -- leaving almost no room for delays in enacting the Fiscal Responsibility Act, which extends the government's borrowing authority through 2024 while trimming federal spending. Hammered out between Democratic President Joe Biden and the Republicans, the measure passed the Senate with a comfortable majority of 63 votes to 36 a day after it had sailed through the House of Representatives. "No one gets everything they want in a negotiation, but make no mistake: this bipartisan agreement is a big win for our economy and the American people," Biden said in a statement posted to social media. He said he would sign the bill "as soon as possible" and address the nation Friday. Democratic Senate Majority Leader Chuck Schumer added that the nation could "breathe a sigh of relief" after avoiding a "catastrophic" economic collapse. "But, for all the ups and downs and twists and turns it took to get here, it is so good for this country that both parties have come together at last to avoid default," he said. The bill -- which now heads to Biden's desk to be signed into law -- ended a day of intense back-and-forth between party leaders and rank-and-file members who had threatened the bill's quick passage with last-minute gripes about the details. Democratic leaders had spent months underlining the havoc that a first default in history would have wrought, including the loss of millions of jobs and $15 trillion in household wealth, as well as increased costs for mortgages and other borrowings. 'Behind the eight ball' The late evening drama came after a series of failed ballots on amendments sought mainly by Republicans who were threatening at one point to hold up the process, dragging it deep into the weekend. Senators elected to offer 11 tweaks to the 99-page text, many objecting to funding levels for their pet projects -- from border control and Chinese trade to taxation and the environment -- and each requiring a vote. Defense hawks upset at Pentagon spending being capped at Biden's budget request of $886 billion threatened at one point to derail the bill's passage entirely. In the end, they fell in line after being offered a commitment to a separate bill providing cash for Ukraine's defense against the Russian invasion, and promoting US national security interests in the Middle East and in the face of Chinese aggression against Taiwan. "As currently written, this bill puts our military behind the eight ball... The first and most important dollars we allocate each year in the budget are those to protect and defend the United States and our interests," said South Carolina Republican Lindsey Graham. America spends more money than it collects through taxation, so it borrows money via the issuing of government bonds, seen as among the world's most reliable investments. Around 80 years ago, lawmakers introduced a limit on how much federal debt could be accrued. Politically toxic The ceiling has been raised more than 100 times since to allow the government to meet its spending commitments -- usually without drama and with the support of Democrats and Republicans -- and stands at around $31.5 trillion. Both parties see raising the debt limit as politically toxic, although they acknowledge that failure to do so would plunge the US economy into a depression and roil world markets as the government missed debt repayments. Republicans hoped to weaponize the extension to campaign against what they see as Democratic overspending ahead of the 2024 presidential election, although hikes in the debt ceiling only cover commitments already made by both parties. Kevin McCarthy, the top lawmaker in the Republican-led House, had touted the bill he spent weeks negotiating as a big victory for conservatives, although he faced a backlash from hardliners on the right who said he made too many concessions on spending cuts. He fell one short of the 150 votes -- two-thirds of his caucus -- he had promised to deliver in the lower chamber as he fought to quell a right-wing rebellion, and needed Democratic help to advance the bill to the Senate. On the other end of Pennsylvania Avenue, the vote was being touted as a major victory for Biden, who managed to protect almost all of his domestic priorities from deep cuts threatened by Republicans. "This legislation protects the full faith and credit of the United States and preserves our financial leadership, which is critical to our economic growth and stability," said US Treasury Secretary Janet Yellen. The post US averts first-ever default with 11th-hour debt deal appeared first on Daily Tribune......»»
Government rejects all bids for P50 billion T-bills, bonds
The government was not able to borrow P50 billion through the sale of short and long-term securities as an initial offshoot of another aggressive monetary policy move of the US Federal Reserve......»»
Investor preference seen shifting to T-bills
Investors may flood the auction for short-dated securities this week and avoid the sale of long-term bonds as they look for safe haven assets in anticipation of an extended lockdown due to the rapid spread of the Delta variant......»»
Government securities to fetch higher rates
Investors are expected to swarm the auctions for government securities this week as rates for Treasury bills and Treasury bonds may rise ahead of a US Federal Reserve meeting, traders said......»»
Local gov t borrowings steady at P140 billion in November
The amount and payment terms of T-bills and T-bonds to be floated next month matches this month’s total offer, which were all fully sold and awarded......»»
Bangko Sentral to start issuance of bills and bonds on September 18
Bangko Sentral ng Pilipinas Governor Benjamin Diokno said Wednesday the bank will start the issuance of its own securities consisting of bills and bonds on Sept. 18, 2020......»»
Milk tariff collections rise by 31% to P2.4 billion
Revenues raised by the government from various imported milk products jumped by 31 percent to P2.36 billion in 2023, the highest in at least eight years, from P1.8 billion in 2022......»»
Vehicle sales rev up by 23% in February
Vehicle sales accelerated by more than a fifth in February from a year ago, supported by automotive firms’ marketing efforts as well as stable interest rates......»»
BTr raises P120 billion from T-bond sale
The government raised the entire program of P120 billion in long-term securities this month even as investors’ asking rates were mixed......»»
NEWS BRIEFS | 26 March 2024
P101-M sea wall to rise in Surigao Sur town A P101.3 million sea wall will be constructed in Marihatag, Surigao del Sur to protect lives and properties from storm surges there. Rep. Romeo Momo (1st District, Surigao del Sur) led the ground breaking of the Marihatag Seawall Project last Sunday, March 24. “The project is a […].....»»