Government funding reaches P1T in the first half

Total national government funding already reached the P1 trillion threshold in the first half of the year, according to Treasury Office data released over the weekend.

In the period from January to June 2022, the actual total financing amounted to 1.07 trillion pounds, with domestic loans amounting to 741.26 billion pounds, while external loans amounted to 329.33 billion pounds.

Retail treasury bonds worth 457.79 billion pesos and 535.38 billion pesos fixed-rate bonds were issued to raise funds from domestic sources.

Meanwhile, project loans totaling 46.85 billion pesos, program loans 136.60 billion pesos, global bonds comprising 117.32 billion pesos, and samurai bonds amounting to 28.55 billion pesos, made up the full amount of external financing.

Actual funding for the whole of 2021 totaled 2.57 trillion pesos, down from 2.74 trillion pesos in 2020 by 5.90 percent.

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The national government has set a total funding ceiling of 2.74 trillion pesos for this fiscal year, according to the Budget Expenditures and Funding Sources of the Ministry of Budget and Administration for the 2022 fiscal year. The amount of external funding has been set at 560.57 pesos. billion dollars and domestic financing is fixed at 1.91 trillion pesos.

Finance Minister Benjamin Dyukno previously announced that in order to reduce foreign exchange risk, the national government will borrow more local creditors.

“The financing mix, if I remember it well, is 75-25 [percent]. I think in the long run, we’ll try to increase that to 80-20 [percent]. We will borrow 80% locally and 20% from foreign sources. We are doing this to reduce foreign exchange risk.”

In addition, Dyukno reiterated that the national government’s strategy of borrowing money from abroad would be opportunistic.

“There are many sources of borrowing in terms of external debt. So, we will choose … the best terms such as, for example, if there are 40 years to pay properly and at low interest, we intend to borrow from those sources,” Dunn is.

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