NG debts breach P7 T in June

MANILA, Philippines — The national government’s debt pile breached the P7 trillion mark as of end-June following the issuance of Retail Treasury bonds (RTBs) and the weak peso, the Bureau of the Treasury (BTr) reported on Friday.

Data showed the national government’s outstanding debt as of June 30 rose 2.7 percent to P7.016 trillion from the previous month’s level of P6.83 trillion.

Of this amount, 65.26 percent or P4.58 trillion was borrowed domestically, while the remaining P2.44 trillion came from foreign lenders.

Domestic borrowings, through the issuance of RTBs, Treasury bills and Treasury bonds, grew 3.5 percent to P4.58 trillion as compared to the end-May level of P4.42 trillion.

“For the month, the increase in domestic debt is attributed to the net issuance of government securities amounting to P154.32 billion and the peso depreciation that increased the value of onshore dollar bonds by P430  million,” the Treasury said.

To recall, the BTr issued P121.765 billion in three-year RTBs at a coupon rate of 4.875 percent last June.

National Treasurer Rosalia De Leon had said proceeds from the fund raising activity would be used to finance the projected fiscal deficit for the year, and to compensate for the past auction rejections made by the BTr during the course of the year.

Meanwhile, the peso further depreciated to 53.404 to $1 as of end-June from the 52.554 to $1 level recorded as of end-May.

During the period, the country’s external debt inched up 1.2 percent to P2.44 trillion from the P2.41 trillion.

The BTr attributed the increase to the weaker peso, that raised the value of foreign debt by P38.95 billion.

However, this was slightly tempered by the net repayment of external loans amounting to P1.58 billion, as well as the impact of the net depreciation on third currency-denominated debt which reached P8.5 billion.

Despite the increase in outstanding debt, BTr data showed the national government’s guaranteed obligations declined slightly to P488.16 billion as of end-June from the previous month’s level of P492.3 billion.

“The reduction in (national government) guarantees was due to the net redemption of both domestic and external guarantees amounting to P4.51 and P2.09 billion, respectively, and net depreciation of third-currency denominated guarantees amounting to P2.34 billion,” the BTr said.

The agency said these outpaced the effect of local currency depreciation against the US dollar, which increased the value of foreign guarantees by P4.81 billion.

However, the BTr said national government guarantees climbed 2.1 percent from the end-December 2017 level of P478.11 billion.