Gov’t debt slightly contracts to P7.8 T in April

MANILA, Philippines — The national government’s debt pile contracted slightly to P7.787 trillion as of end-April due mainly to the strengthening of the peso which lowered the value of the country’s external debt, according to the Bureau of the Treasury.

According to latest data from the BTr, the national government’s outstanding debt as of end-April dropped by 0.2 percent or P15.45 billion to P7.787 trillion, coming from a record high of P7.802 trillion in the previous month.

Since the beginning of the year, the country’s debt stock increased by 6.8 percent or P494.31 billion from the P7.29 trillion recorded as of end-2018.

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 66.8 percent of the total debt pile was borrowed from domestic lenders, while the remaining 33.2 percent was sourced from external creditors.

Domestic debt rose slightly by 0.2 percent to P5.205 trillion from P5.197 trillion as of end-March 2019.  

“For April, net issuance of government securities amounting to P8.82 billion brought the increase in the level of domestic portfolio, while P270 million was trimmed due to revaluation of onshore dollar bonds due to peso appreciation,” the BTr said.

On the other hand, the Treasury said external debt declined by 0.9 percent to P2.581 trillion from P2.605 trillion in the previous month.

The agency attributed this to the downward adjustments in the value of both dollar and third-currency denominated debt amounting to P26.29 billion and P280 million, respectively.

This offset the net availment of foreign loans amounting to P2.57 billion during the period.

Meanwhile, the Treasury said the national government’s guaranteed obligations as of end-April rose by 0.7 percent to P482.98 billion from P479.67 billion in the previous month.

 “This was due to the net issuance of both domestic and external guarantees amounting to P6.44 billion and P240 million, respectively. However, this was tempered by the downward adjustments on both peso and third currency denominated guarantees which trimmed P2.91 billion and P450 million, respectively,” the BTr said.

From the end-December 2018 level, guaranteed debt decreased by P4.6 billion or 0.9 percent.

For 2019, the national government is programmed to borrow P1.19 trillion, 20 percent higher than last year’s borrowing program of P986 billion.

Of the amount, P297.2 billion ($5.504 billion) is expected to come from foreign lenders, while the remaining P891.7 billion is expected to come from domestic creditors.