Government debt bloats to all-time high of P7.8T

MANILA, Philippines — The national government’s debt pile jumped to another all-time high of P7.802 trillion as of end-March due to currency adjustments and the net issuance of government securities, according to the Bureau of the Treasury.

Based on the latest BTr data, the national government’s outstanding debt expanded by P350.7 billion or 4.7 percent to P7.802 trillion as of end-March from the P7.452 trillion recorded as of end-February.

Since the beginning of the year, the increase in the government’s debt stock has reached P509.76 billion, translating to a seven-percent increase from the end-2018 level of P7.29 trillion.

The government borrows from both domestic and external lenders to plug the expected deficit in its budget, which is capped at 3.2 percent of this year’s gross domestic product (GDP).

Treasury data showed that 66.6 percent of the total debt stock as of end-March came from domestic lenders, while the remaining 33.4 percent was sourced from external creditors.

Domestic debt rose by 6.1 percent or P298.64 billion to P5.197 trillion as of end-March from P4.898 trillion a month earlier, as the government issued more debt papers than those it redeemed.

“For the month, the increment in the level of domestic debt was caused by the net issuance of government securities amounting to P298.21 billion and the P430 million revaluation of onshore dollar bonds brought about by peso depreciation,” the Treasury said.

From the start of 2019, domestic debt has increased by P419.96 billion or 8.8 percent from the end-2018 level of P4.777 trillion.

Similarly, the national government’s external debt as of March 31 grew by two percent to P2.605 trillion from P2.553 trillion as of end-February.

“The higher external debt for the month was principally due to the impact of local currency fluctuation against the dollar amounting to P42.42 billion and net availment of foreign loans amounting to P11 billion,” the Treasury said.

This offset the impact of the net depreciation, which shaved off the value of third-currency denominated debt by P1.36 billion.

Meanwhile, Treasury data also showed that the national government’s total guaranteed obligations climbed by 1.3 percent to P479.67 billion in March from P473.37 billion a month earlier.

The BTr attributed the increase to the net issuance of domestic guarantees amounting to P2.79 billion, as well as currency fluctuations, which increased the value of external guarantees.

From the end-December 2018 level, guaranteed debt decreased by P7.92 billion or 1.6 percent.