Government debt swells to record high P11 trillion

MANILA, Philippines — The national government’s outstanding debt rose to a fresh record high of P10.991 trillion in April, boosted by both local and external borrowings, the Bureau of the Treasury (BTr) said.

The total debt portfolio further grew by two percent or by P217.49 billion from its end-March level. Out of the total debt stock, 28.9 percent was sourced externally while 71.1 percent was domestic borrowings.

The country’s debt-to-GDP ratio, however, remains below the internationally acceptable threshold of 60 percent, effectively giving it room to spend and borrow more to support the economy.

This year, economic managers expect this to rise to as much as 57 percent as borrowings are ramped up to P3 trillion to finance pandemic-response expenses.

Domestic debt amounted to P7.812 billion, inching up by 0.9 percent from the end-March level, mainly due to the issuance of more government securities.

Coming from the end-2020 level, outstanding domestic debt rose by 16.7 percent.

External debt, meanwhile, rose by 4.9 percent to P3.178 billion in April from the previous month.

The increase was due to the net availment of foreign loans amounting to P163 billion, including P146.16 billion from the issuance of global bonds.

Other adjustments include the impact of third-currency appreciation against the dollar which added P10.91 billion to the external debt portfolio while local currency appreciation trimmed it by P24.21 billion.

From the end-2020 level, external debt increased by 2.5 percent.

Total guaranteed obligations by the national government, meanwhile, decreased by 0.2 percent to P434.74 billion in April from the March level.

The lower level of guaranteed debt during the period was due to the net redemption of both local and foreign guaranteed obligations amounting to P750 million and P80 million, respectively.

Local currency exchange rate fluctuations further lowered the peso value of external guaranteed debt by P1.57 billion while third-currency appreciation added P1.33 billion to the peso value of guarantees.