The outstanding debt of the national government rose further in the first semester as shortfalls in revenue collection forced a sustained dependence on borrowings.
The Department of Finance, however, said the manageability of the government’s debts continued to improve, saying the proportion of the obligations to the size of the economy was shrinking through the years and that the increase in the debt was slower than the pace of the economy’s expansion.
Government documents showed that the outstanding debt amounted to P5.45 trillion as of the end of June, up 6.9 percent from P5.1 trillion a year ago.
The latest figure also was up 1.6 percent from the P5.36 trillion registered as of the end of May this year.
If the estimated 94 million Filipinos would be made to equally share the burden of settling the government’s outstanding debt, each would have to shoulder about P58,000.
A bigger portion, or P3.5 trillion, of the outstanding debt was accounted for by peso-denominated liabilities. This was higher year-on-year by 15 percent from P3.05 trillion.
The DOF said the government maintained a policy of relying more on borrowings from local sources and less on borrowings from foreign sources to avoid incurring too much foreign-exchange risks. Borrowings denominated in US dollar or other foreign currencies would bloat the outstanding debt whenever the peso depreciated, it explained.
The balance of P1.95 trillion was accounted for by debts denominated in foreign currencies. This was down year-on-year by 5 percent from P2.05 trillion.
For this year, the government decided not to tap the international market for its commercial borrowing requirements. The decision was also meant to help temper the steep appreciation of the peso due to too much inflow of foreign portfolio investments and remittances, among others.
In 2014, however, the government intends to go back to the international capital market as the peso has depreciated this year.
With the economy’s robust expansion and what the DOF said was a modest rise in government borrowings, the proportion of the outstanding debt to the country’s gross domestic product by the end of this year is expected to fall to 48.7 percent.