NG debt hits P6 T in 7 months

MANILA, Philippines - The national government’s debt pile neared the P6-trillion mark in the first seven months as a weak peso and higher bond issuance pushed it up, the Bureau of the Treasury reported.

Liabilities reached P5.98 trillion as of July, 0.6 percent up from the P5.95 trillion recorded in the first half. Since the start of the year, debts have already risen 0.7 percent.

Obligations are compared every month than year-on-year since they add or subtract to an existing pile. This is the first monthly report under the Duterte administration which also recorded a higher budget deficit in July.

The government borrows to bridge the budget gap and pay existing debts. 

Broken down, both domestic and external liabilities rose from January to July, latest data showed. 

Local debts increased a faster 0.7 percent at P3.86 trillion due to the “net issuance of government securities and the revaluation of dollar-denominated bonds due to peso depreciation.”

Specifically, the increase was recorded at P3.856 trillion from P3.83 trillion. Loans by agencies were steady at P598 million.

Treasury sells bonds and bills at least twice a month in a regular auction. Last February, the government also issued dollar bonds onshore, which are then recorded as local liabilities.

On the external front, obligations hit P2.13 trillion, up 0.3 percent year-on-year, figures showed.

“The change was the combined effect of currency fluctuations on US-dollar and third currency-denominated debt that raised the peso value of outstanding obligations,” Treasury said.

A slight depreciation in the local currency was used to calculate for the peso value of debts at 47.09 to a dollar. In the previous month, the rate was at 47.007.

Broken down, loans inched up 0.47 percent to P823.59 billion, while the value of foreign debt securities increased 0.58 percent to P1.31 trillion.

In contrast, the government lowered the amount of its contingent debts or those mostly incurred by state-owned corporations but are guaranteed against default.

From January to July, these obligations declined 0.2 percent to P562.43 billion, data showed.