Debt soars to record high P11.16 trillion in June

MANILA, Philippines — The country’s outstanding debt ballooned to a fresh record high of P11.16 trillion as of end-June, the bulk of which consists of domestic obligations.

The Bureau of the Treasury (BTr) yesterday reported the total debt stock of the Philippines jumped by P2.11 trillion or more than 23 percent to a new high of P11.16 trillion as of end-June from P9.05 trillion a year ago.

Domestic borrowings, which made up 71 percent of total debt, surged by over 28 percent to P7.93 trillion as the government sped up the issuance of debt papers to bankroll its pandemic measures.

Government securities made up over 93 percent of local debt at P7.93 trillion, while direct borrowings comprised the remaining seven percent at P540.15 billion. The Treasury borrowed a total of P249 billion through the auction of Treasury bonds and T-bills in June.

On the other hand, foreign debt increased by about 13 percent to P3.22 trillion as of end-June, from P2.86 trillion during the same period last year. The Treasury said external borrowings went up due to the depreciation of the local currency and acquisition of new loans.

Broken down, bonds of various denominations took up more than 56 percent of external debt at P1.81 trillion, while loans secured by state agencies and government firms accounted for the remaining 44 percent at P1.41 trillion.

The Treasury also reported guaranteed debt held by the government fell by about five percent to P438.6 billion as of end-June, from P460 billion in end-June 2020, although it went up by some three percent from P426.59 billion in the prior month.

The Treasury attributed the monthly increase in guaranteed obligations to the takeup of P11.07 billion in onshore guarantees, as well as the depreciation of the local currency by P3.98 billion.

The government plans to borrow a total of P3.02 trillion this year to finance its response efforts on COVID-19. On an 85:15 ratio, the bulk of the debt will be acquired from local investors at P2.58 trillion, while another P442.36 billion will be sought from foreign lenders.

By the end of 2021, the outstanding debt is expected to reach an all-time high of P11.98 trillion, according to government estimates. Likewise, the economic team projects the debt-to-GDP ratio to balloon to 59.1 percent this year.