Government debt pile down slightly to P7.906 trillion

MANILA, Philippines — The national government’s outstanding debt slightly declined to P7.906 trillion as of October due to the appreciation of the peso, which reduced the value of offshore obligations, according to the Bureau of the Treasury (BTr).

According to the latest data from the Treasury, the country’s debt pile as of Oct. 31 this year declined by 0.02 percent or P1.61 billion from the P7.908 trillion recorded in the previous month.

Since the start of the year, the government’s debt stock has increased by 8.41 percent from the end-2018 level of P7.29 trillion, while a 10.31 percent growth was registered compared to the end-October 2018 level of P7.167 trillion.

The Philippine government borrows from both domestic and external lenders to plug the expected deficit in its budget, which is capped at 3.2 percent of the 2019 gross domestic product (GDP).

Based on Treasury data, the bulk or 67.1 percent of the total debt stock as of end-October came from domestic lenders, while the remaining 32.9 percent are from external creditors.

Domestic obligations, in particular, amounted to P5.305 trillion, which is 0.89 percent higher than the P5.258 trillion recorded as of end-September.

The BTr attributed the increase to the net issuance of government securities amounting to P47.53 billion for the month of October. This was partially offset by the impact of peso appreciation, which reduced the value of onshore dollar bonds by P520 million.

The local currency strengthened to 50.769 to $1 by the end of October from the end-September level of 51.795 to $1.

Since the beginning of the year, domestic debt has increased by P527.92 billion or 11.05 percent, while year-on-year expansion settled at 14.82 percent.

Meanwhile, the national government’s external debt stock as of end-October declined by 1.83 percent to P2.601 trillion from P2.65 trillion in the previous month.

“The decline can be attributed to local currency appreciation which trimmed the valuation of dollar-denominated debt by P52.49 billion,” the Treasury said. Furthermore, there was also a net repayment of foreign loans amounting to P630 million during the period.

The Treasury said external debt has risen by 3.41 percent since the beginning of the year, while year-on-year, it has increased by 2.14 percent.

According to the BTr, the national government’s total guaranteed obligations in October 2019 went down by 1.4 percent to P477.65 billion from P484.43 billion in September.

“The lower level of guarantees was due to the combined effect of local and third-currency fluctuations that reduced the value of external guarantees by P4.65 billion and P30 million, respectively. In addition, the P2.14 billion net repayment of domestic guarantees offset the P50 million net availment of external guarantees,” the BTr said.

From the end-December 2018 level of P487.59 billion, total guaranteed debt decreased by 2.04 percent.