Gov’t debt rose 4.9% to P5.59T in January, says BTr
The government’s debt stock rose anew in January as the government continued to rely on borrowings to partly finance its expenditures.
The Bureau of the Treasury reported Tuesday that the government’s debt stock reached P5.59 trillion as of end-January, up by 4.9 percent year-on-year.
The lion’s share of P3.62 trillion was accounted for by borrowings from the domestic market.
This marked a 6.1-percent increase from that in the same period last year.
The balance of P1.97 trillion came from borrowings from foreign sources. This was up year-on-year by 2.6 percent.
The government has made it a policy to borrow more from local rather than foreign sources to avoid too much exposure to foreign-exchange risks.
The government likewise decided against borrowing from commercial sources.
It thus secured foreign loans mainly from providers of official development assistance (ODA), which are much cheaper than commercial borrowings.
The country’s biggest sources of ODA are the Japan International Cooperation Agency, Asian Development Bank and the World Bank.
Despite the sustained increase in the government’s outstanding debt, the Department of Finance said the liabilities were manageable.
This is because the rate of increase in the debt stock is expected to be slower this year than the growth of the economy, as was the case in 2013.
The Philippine economy grew by 7.2 percent in real terms last year, one of the fastest rates in Asia.
In nominal terms, the economy grew by 9.2 percent.
In contrast, the government’s debt stock as of the end of 2013 grew by only 4.5 percent year-on-year to P5.68 billion.
Given this, the Philippine government’s debt-to-gross domestic product (GDP) ratio, a closely watched indicator of creditworthiness, fell further to 49 percent last year from 51.5 percent in 2012.
The drop in the ratio was cited as among the reasons behind the investment grades that the Philippines secured last year.
All three major international credit rating agencies upgraded the country’s credit score from junk to the minimum investment grade.
Fitch Ratings was the first to do so in March. Standard & Poor’s and Moody’s Investors Service followed in May and October.
Because of the Philippines’ ability to sustain the decline in the debt burden, its robust economic growth, and other favorable macroeconomic indicators, economic officials have said the country deserved another upgrade in credit ratings.
