Government debt climbs to P7.73 trillion in 2019

MANILA, Philippines — The government’s debt pile rose by six percent to P7.731 trillion in 2019 from P7.293 trillion in 2018, according to the Bureau of the Treasury (BTr).

However, despite the increase in total debt, the BTr said the government’s debt-to-GDP ratio managed to improve to 41.5 percent in 2019 from 41.9 percent in 2018, also beating the program of 41.7 percent for the year.

“The improved debt-to-GDP ratio is a result of prudent cash and debt management, backed by steady economic growth,” the Treasury said.

The government borrows from both domestic and external lenders to plug the expected deficit in its budget.

On a month-on-month basis, BTr data showed that the outstanding debt of the government inched up by 0.3 percent from P7.71 trillion in November 2019.

The BTr attributed the slight uptick to the net availment of loans, as well as the depreciation of the peso from 50.758 to $1 as of end-November to 50.802 as of end-December.

Of the total debt stock, the bulk, or 66.3 percent, came from domestic lenders, while the remaining 33.7 percent were from external creditors.

Domestic obligations, in particular, grew slightly by 0.2 percent to P5.128 trillion as of end-December from P5.116 trillion in November.

“For the month, domestic debt increased mainly due to the net issuance of government securities amounting to P11.96 billion and the P20 million effect of peso depreciation on onshore dollar bonds,” the BTr said. 

Year-on-year, domestic debt increased by 7.3 percent compared to the P4.777 trillion in 2018.

External debt likewise climbed by 0.4 percent to P2.604 trillion as of end-December from P2.594 trillion a month earlier.

The Treasury said this increase was due to the net availment of foreign loans amounting to P2.51 billion, as well as the combined effect of local and third-currency fluctuations, which increased the value of foreign debt by P2.25 billion and P4.9 billion, respectively.

Year-on-year, the country’s foreign debt increased by 3.5 percent from P2.516 trillion in December 2018.

Meanwhile, total guaranteed obligations as of the end-December 2019 rose by 2.9 percent to P488.75 billion from P475 billion in the previous month.

“For the month, the higher level of guarantees was due to local and third-currency fluctuations that increased the value of external guarantees by P200 million and P1.02 billion respectively, and the net issuance of domestic guarantees amounting to P13.85 billion,” the national treasury said.

“This was tempered by the net repayment of external guarantees amounting to P1.32 billion,” it said.