Government debt dwindles to P9.37 trillion in September

MANILA, Philippines — The country’s debt pile contracted to P9.37 trillion as of end-September following the repayment of the government’s loan from the Bangko Sentral ng Pilipinas (BSP) last month, the Bureau of the Treasury (BTr) reported yesterday.

According to the latest data from the BTr, the national government’s outstanding debt as of end-September fell by P246.15 billion or 2.6 percent from a record-high of P9.62 trillion in August.

The Treasury said this was mainly due to the repayment of the P300 billion short-term loan availed by the national government from the Bangko Sentral ng Pilipinas (BSP) through a repurchase agreement in March.

This was partially offset by the net availment of foreign loans for the month of September.

Since January, the country’s outstanding debt ballooned by P1.64 trillion or 21.2 percent from the end-December 2019 level of P7.73 trillion.

According to the Treasury, the bulk or 68.7 percent of the government’s total debt stock as of end-September came from domestic lenders, while the remaining 31.3 percent was sourced from external creditors.

Domestic debt, in particular, declined by 4.1 percent to P6.44 trillion compared to the P6.71 trillion recorded in the earlier month due to net repayment.

To date, domestic debt has increased by P1.31 trillion or 25.6 percent since the beginning of the year.

The BTr said the national government’s gross domestic borrowings in the first nine months amounted to P2.64 trillion. This covers P1.02 trillion in Treasury bill (T-bill) issuances, P492.86 billion in Treasury bonds (T-bonds), P827.11 billion in retail Treasury bonds, and loans from the BSP.

On the other hand, the Treasury said gross maturities reached P1.33 trillion, which include P629.07 billion in T-bills, P309.39 billion in T-bonds, and P300 billion in loans from the BSP.

Meanwhile, BTr data showed the government’s outstanding external debt inched up by one percent to P2.93 trillion from P2.9 trillion in August.

“For September, the increment to the external debt portfolio was attributed to the P33.22 billion net availment of external loans,” the bureau said.

This was partially offset by the impact of currency fluctuations, which trimmed the peso value of both dollar and third-currency denominated foreign loans by P3.65 billion and P1.08 billion, respectively.

From January to September, the national government’s external financing registered an inflow amounting to P550.27 billion, while debt repayment was recorded at P123.19 billion.

During the period, the Philippines availed P19.31 billion in project loans and P344.89 billion in program loans. Offshore bond issuances also reached P186.06 billion.

From the end-December 2019 level of P2.6 trillion, external debt has increased by P326.81 billion or 12.6 percent.

Meanwhile, the BTr said the government’s total guaranteed obligations decreased by 0.4 percent to P445.4 billion as of end-September from P447 billion in August.

The Philippines is currently ramping up its borrowings to plug the deficit in its budget, which is expected to widen to P1.82 trillion or 9.6 percent of gross domestic product (GDP) due to weak revenue generation and increased spending requirements amid the pandemic.

For 2020, the Philippines is programmed to borrow P3 trillion.

Budget documents showed that the debt pile is expected to hit P10.16 trillion by the end of 2020, before further increasing to P11.98 trillion in 2021.

These would translate to a debt-to-gross domestic product level of 53.9 percent for 2020 and 58.1 percent for 2021.