Gross financing of the national government has already increased in the first seven months of the year due to higher domestic borrowings.

The latest data from the Bureau of Treasury (BTr) showed that the national government's gross borrowings from January to July 2023 reached P1.46 trillion.

Gross borrowing is the entire sum of loans or borrowings made by the government from domestic and international sources to cover its necessary expenditures and close budget gaps.

During the first seven months, gross domestic borrowings reached P1.17 trillion, while the gross external financing reached P387.88 billion.

Fixed-rate treasury bonds worth P794.53 billion, retail treasury bonds worth P283.76 billion and net treasury bills worth P88.70 billion were both issued to raise funds from domestic sources.

Meanwhile, project loans totaling P79.21 billion, program loans of P145.06 billion, and global bonds comprising P163.60 billion made up the entire amount of external funding.

*July borrowings down*

Meanwhile, the national government's July borrowings declined year-on-year, mainly due to reduced loans acquired from local creditors.

Marcos administration's borrowing in July came to P131.13 billion, down from P174.21 billion during the same month last year.

The decrease in borrowing from the domestic market is mainly the cause of the decline.

In July 2023, gross local financing stood at P167.81 billion. However, the government's net local borrowing reached P110.5 billion this year.

Out of the total, P108.4 billion came from the sale of long-term debt papers, while P2.12 billion was acquired through short-term IOU offerings.

National Treasurer and Monetary Board member Rosalia de Leon previously stated that the government needs to borrow money because its spending outweighs its revenue collections.

Due to this condition, a budget deficit must be solved via borrowing.

But not all the money the government borrows goes toward closing the budget gap. A portion of it is used to pay off past debts, including interest.