Government debt declines to P7.7 trillion in end November

MANILA, Philippines — The country’s debt pile as of the end-November 2019 dropped by 2.5 percent to P7.71 trillion compared to P7.91 as of October 2019 as the government redeemed more matured securities than the volume it issued, according to the Bureau of the Treasury (BTr).

The BTr attributed the decline in government debt mainly to the net redemption of domestic government securities during in November.

Since the start of 2019, the national government’s debt stock has grown by 5.7 percent from the end-2018 level of P7.29 trillion. The current debt level was likewise 7.2 percent higher compared to the P7.2 trillion recorded in the same month in 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 gross domestic product (GDP) in 2019.

Based on Treasury data, the bulk or 66.4 percent of the total debt stock came from domestic lenders, while the remaining 33.6 percent came from external creditors.

Domestic obligations dropped by 3.6 percent to P5.12 trillion in November last year from P5.3 trillion a month earlier.

“For November, domestic debt decreased mainly due to the net redemption of government securities amounting to P189.15 billion and P10 million due to the effect of peso appreciation on onshore dollar bonds,” the BTr said.

Likewise, external debt as of end-November went down by 0.3 percent to P2.59 trillion from P2.6 trillion in October.

“For November, the decline in external debt was due to the combined effects of local and third-currency foreign exchange adjustments, which decreased the value of foreign debt by P56 million and P6.18 billion, respectively,” the BTr said.

Furthermore, the Treasury said there was a net repayment of external loans during the month amounting to P530 million.

Meanwhile, BTr data showed that the national government’s guaranteed obligations decreased by 0.6 percent to P475 billion from P477.65 billion in the previous month.

“The lower level of guarantees was due to foreign exchange movements which reduced the value of external guarantees by P1.61 billion,” the Treasury said.