Debts rise to P4.42T after borrowing binge

01/19/2010

Increased borrowings pushed up the country’s outstanding debts to P4.42 trillion last October, a two percent increase from the previous month of P4.34 trillion, Bureau of Treasury (BTr) data released yesterday showed.

Data showed that of the total debts until October last year, P2.45 trillion were in domestic obligations which are mainly government securities and foreign borrowings of P1.98 trillion.

The BTr attributed the rise in the October debt data to higher local borrowings and a weaker peso.

The government resumed its major borrowing program this year when it sold $1.5 billion worth of dollar bonds early this month, the first sovereign debt issue in Asia for the year.

It also borrowed $1 billion through a global bond issue in October to finance the budget deficit this year.

The government estimated the fiscal shortfall last year would reach P300 billion and latest estimates for the budget deficit this year sees it reaching a similar record level.

The government is also considering selling $1 billion in bonds to the Japanese market in February or March after an expected roadshow next month to plug a record budget gap this year.

Estimates put the budget gap this year to reach P293 billion, or 3.5 percent of gross domestic product (GDP), after an expected fiscal gap of P290 billion, or 3.7 percent of GDP, in 2009.

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