National debt breaches P13 trillion level in August  

MANILA, Philippines — The outstanding debt of the national government has breached the P13-trillion mark after jumping to another record-high in August, effectively closing in to 97 percent of the expected obligations this year, according to the Bureau of the Treasury (BTr).

Latest data from the BTr showed the national debt went up to an all-time high of P13.02 trillion as of end-August.

The latest figure was slightly higher than the P12.89 trillion debt recorded a month earlier and was 11.8 percent larger than the P11.64 trillion in obligations on a yearly basis.

Some P133.64 billion was added to the debt stock during the month in review due to the net issuances of domestic securities as well as currency adjustments.

For the two months in office of the Marcos administration, it has so far added P229.73 billion to the total debt stock.

The latest debt figure already accounted for 97 percent of the P13.43 trillion expected debt pile by the end of the year.

As the debt pile continues to increase, Rizal Commercial Banking Corp. chief economist Michael Ricafort said the government would have to intensify tax revenue collections and implement tax reform measures to cut the country’s ballooning debt.

He said fiscal reform measures such as disciplined spending, government right-sizing, preventing wastage in government spending and anti-corruption measures are also necessary to reduce the debt.

“Tax reform and other fiscal reform measures, alongside faster economic growth, would help ease the national government’s debt-to-gross domestic product (GDP) ratio to below the international threshold of 60 percent in the coming years,” Ricafort said.

The Treasury said domestic borrowings accounted for the majority or 68.7 percent of the debt pile while the remaining 31.3 percent came from external sources.

Domestic debt at P8.94 trillion inched up by 1.3 percent on a monthly basis and jumped by 8.8 percent from P8.22 trillion a year ago.

The increase was attributed to the net issuance of P109.43 billion in government securities and P1.78 billion from the impact of weaker local currency exchange against the dollar. The peso depreciated to 56.171 against $1 as of end-August.

Domestic debt has increased by 9.5 percent to P772.98 billion since the start of the year.

External obligations, on the other hand, also increased by 0.6 percent to P4.08 trillion month-on-month and surged by 19.2 percent from P3.42 trillion in the same period last year.

The Treasury said the increment in external debt was also due to the impact of local currency fluctuations against the dollar amounting to P62.24 billion.

This offsets the P26.59 billion effect of third-currency depreciation against the dollar and net repayment of P13.22 billion.

Meanwhile, total debt guaranteed obligations went down by 3.7 percent to P392.76 billion due to the net repayment of both domestic and external guarantees amounting to P4.43 billion and P10.81 billion, respectively.

The country’s debt level, when measured against GDP, decreased to 62.1 percent in the second quarter from the 17-year high of 63.5 percent in the first quarter.

But this ratio remains above the internationally accepted threshold of 60 percent, which puts the Philippines in a vulnerable spot in terms of its capacity to pay its financial obligations.