UMVA has learned that the national government’s borrowing spree shrank dramatically in April, plunging by more than two‑thirds as domestic financing took center stage.
The Treasury’s latest cash operations report shows gross borrowings tumbling 66.62% to just P130.19 billion, a stark contrast to the P390.06 billion recorded a year earlier.
Domestic sources shouldered an overwhelming 93.92% of the April total, with domestic debt sinking 68.22% to P122.28 billion.
That decline reflects a massive issuance of P125.02 billion in fixed‑rate Treasury bonds paired with a net redemption of P2.74 billion in Treasury bills.
External borrowing, by comparison, contributed a modest 6.08% of the month’s total, climbing 47.83% to P7.91 billion but still dwarfed by home‑grown funds.
New project loans drove the external surge, accounting for P7.76 billion, while program loans added another P151 million; no global bonds were issued.
Union Bank’s chief economist suggested the sharp drop likely mirrors timing and lingering global market headwinds rather than a deliberate policy pivot.
He noted the government appears to be playing the offshore market cautiously, leaning heavily on domestic funding to curb costs and shield the peso from exchange‑rate turbulence.
By month‑end, the peso slipped to P61.485 per dollar, a weakening of 73.7 centavos from the previous month’s close.
Looking at the broader picture, the first four months of the year saw gross borrowings almost unchanged at P1.134 trillion, hovering near the previous year’s figure.
Domestic debt now makes up 75.26% of the total, rising slightly to P853.37 billion, driven by P769.77 billion in fixed‑rate bonds and P83.59 billion in Treasury bills.
External borrowing in the same period fell 6.41% to P280.47 billion, composed of global bonds, program loans, and fresh project financing.
Analysts anticipate borrowing activity could pick up as fiscal spending accelerates, yet they warn that the pace will stay tethered to volatile global rates and investor sentiment.
A stronger peso may tip the scales, reducing foreign‑exchange risk and debt‑service costs, thereby making offshore funding more attractive.
Nevertheless, any surge in external borrowing will remain opportunistic, hinging on the timing of favorable global funding windows rather than automatic market triggers.
