MANILA, OCTOBER 26, 2010 (TRIBUNE) Government borrowings in the first nine months jumped by nearly 60 percent to P672.24 billion from P421.1 billion a year ago as the Aquino administration struggles to limit the budget gap to within P300 billion this year amid still anemic tax collections.

Bureau of the Treasury (BTr) data showed that of the total new debts, domestic borrowings comprised 80 percent reaching P458.4 billion against P213.84 billion in foreign borrowings.

Total domestic borrowings as of end-September this year is higher than year-ago’s P252.94 billion and composed of P382.71 billion worth of Treasury bonds (T-bonds) and P119.8 billion of retail Treasury bonds (RTBs).

The government has paid P44.1 billion more than the short-term debt instrument it issued during the period.

On the other hand, the government’s external debt during the same period rose by 25 percent year-on-year compared to the P168.17 billion.

These loans are composed of, among others, the P44.11 billion worth of its maiden peso-denominated global bonds issued last September, P68.51 billion of dollar-denominated global bonds in January, P51.74 billion worth of yen-denominated Samurai bonds last March and program loans amounting to P30.88 billion and project loans amounting to P18.6 billion.

To maximize the low-interest rate in the country as well as domestic fund sources, its debt profile continues to show expansion in domestic obligations, which as of the end of the first nine months this year accounts for two-thirds of the total.

Also, the government has started to exchange its existing short-term debt instrument for longer tenors to reduce bunching up.

Recently, National Treasurer Roberto Tan said they will conduct a domestic debt exchange within few weeks but declined to give a possible volume to be exchanged.

The government conducts bond swaps to lengthen the life of its securities as part of its fiscal management.

Also recently, the NG joined the international financial market and exchanged short-term bonds with those maturing in 2034 as well as issued US$ 4.48 million worth of fresh 2021 bonds.

Bonds maturing in 2011, 2013, 2014, 2015, January 2016, October 2016, and in 2017 were swapped with newly-issued 10-year US dollar-denominated bond or the re-opened 2034.

Also, those maturing in January 2019, June 2019, September 2024, October 2024 and those due in 2025, 2030, and 2031 were also exchanged for bonds due 2034.

Relatively, the government’s long-term debt includes the P109.7 billion worth of seven-year bonds, P103.24 billion worth of three-year bonds, P58 billion worth of 10-year debt notes, P49 billion worth of 20-year obligation, P42 billion worth of 25-year bonds, and P20 billion of five-year notes. PNA

Chief News Editor: Sol Jose Vanzi

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