Gov't debt slightly down in November

Prinz Magtulis (Philstar.com) - January 5, 2016 - 8:32pm

MANILA, Philippines - The debt stock of the national government (NG) inched down for the first 11 months of last year as more local and foreign obligations were paid, latest government data showed.

In a statement at its website, the Bureau of the Treasury reported that NG debt totaled P5.953 trillion as of November, down 0.09 percent from P5.958 trillion in the first 10 months.

Broken down, domestic debts reached P3.896 trillion, while their foreign counterparts amounted to P2.057 trillion

The former was down 0.06 percent, while the latter decreased 0.13 percent during the same period.

For local debts, the bulk were issued in the form of government securities, which summed up to P3.895 trillion. The Treasury said the decline in peso-denominated debts were recorded as more securities were redeemed.

“The reduction in domestic obligations was due to net redemption of government securities amounting to P2.51 billion,” the agency pointed out.

The NG sells Treasury bonds and bills to investors every two weeks. T-bonds and T-bills are instruments used to borrow money from local investors, who in turn, benefit from the interest charged on the papers.

Redemption means the government already paid the face value plus total interest in the security.

On the other hand, direct and assumed local loans by state agencies were steady at P598 million, figures showed.

As for foreign debts, the Treasury also attributed its decrease to higher payments of state obligations as well as deeper depreciation of other currencies against the dollar than the peso.

“The external debt portfolio still went down due to the combined effect of net repayments and the depreciation of third-currencies against the US dollar,” the statement said.

Specifically, direct foreign loans dipped 0.83 percent to P757.08 billion, data showed. The Treasury said a total of P5.17 billion in net repayments were recorded as of November.

The decline more than offset a 0.28-percent increase in the value of foreign government bonds to P1.3 trillion.

In November, the peso-dollar exchange rate was pegged at a weaker 47.10 as against October's 46.90. Low peso value increases the amount of existing foreign debts.

However, the peso’s 5.23-percent decline against the greenback last year was tamer than other Asian currencies such as the Malaysian ringgit’s 19 percent and Indonesian rupiah’s 9.9 percent.  

The NG borrows from the domestic and foreign markets to bridge its budget deficit or settle existing debts.

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