Gross loans fell by 31% in April

National government (NG) gross borrowings fell in April as domestic and foreign debt fell, Bureau of the Treasury (BTr) data showed.

BTR data showed that NG’s total gross loans fell 31.3% to P89.202 billion in April from P129.906 billion in the same month a year ago.

Month-on-month, gross loans declined 57% from P207.265 billion in March.

Domestic loans accounted for the largest share, or 92%, of total gross debt during the month.

Gross domestic debt fell 14.3% to P82.36 billion in April from P96.127 billion in the same month in 2023.

Broken down, domestic loans amounted to P67.258 billion Ffixed-rate government bonds and P15.102 billion in treasury bills.

Meanwhile, gross external debt fell 79.7% to P6.842 billion during the month from P33.779 billion a year ago.

In April, gross external loans consisted entirely of new project loans.

Michael L. Ricafort, chief economist of Rizal Commercial Banking Corp., said the increase in tax collections in April oFmade it necessary for the government to resort to loans.

Bureau of Internal Revenue collections rose 12.65% to P378.5 billion this month. This is the deadline for the Fpreparing annual income tax returns and FThe VAT returns for the first quarter were in April.

“The relatively lower amount of maturing government debt in April also reduced the need to borrow to finance maturing debt,” Mr Ricafort added.

Meanwhile, gross loans rose 7.9% to P1.16 trillion in the January-April period from P1.08 trillion in the year-ago period.

Gross domestic loans rose 38.7% to P1.04 trillion in the US Ffirst four months, compared to P749.113 billion a year earlier.

Domestic debt consisted of P584.861 billion in government bonds (RTBs), P377.258 billion in FFixed-rate government bonds and P76.822 billion in treasury bills.

In February, the government raised a record €584.86 billion from its five-year RTB offering.

On the other hand, gross external debt fell 62.3% to P124.099 billion at the end of April from P328.883 billion a year ago.

This consisted of P95.435 billion in program loans and P28.664 billion in new project loans.

“Future government borrowing would also be a function of fiscal deficit performance for the coming months,” Mr. Ricafort said.

TThe NG posted a budget surplus of P42.7 billion in April, although this was 36.03% smaller than the surplus of P66.8 billion a year ago.

In the January-April period, the budget deficit rose by 12.66% to 229.9 billion euros, compared to the deficit of 204.1 billion euros a year earlier.

“Government borrowing for the coming months would also be timed with possible rate cuts by the Fed and local governments later in 2024 and 2025,” Ricafort said.

Bangko Sentral ng Pilipinas Governor Eli M. Remolona Jr. has indicated that the central bank could begin its policy easing cycle as early as August this year.

The Monetary Board kept its benchmark interest rate at a 17-year high of 6.5% for the fifth straight meeting earlier this month.

The central bank has increased borrowing costs to a total of 450 basis points (bps) between May 2022 and October 2023.

The government’s borrowing program is set at £2.57 trillion for 2024, of which 75% will come from domestic sources.

The government is borrowing from local and external sources to help finance a budget deficit capped at 5.6% of gross domestic product this year. years, equivalent to P1.48 trillion. — Luisa Maria Jacinta C. Jocson