Gov’t debt burden hit P5.6T in end-May

The national government’s debt declined month-on-month in May partly due to the stronger peso, which brought down the value of the state’s foreign exchange-denominated obligations, data released by the Bureau of the Treasury showed.

In a statement, the Treasury said the national government’s outstanding debt stood at P5.6 trillion at the end of May, down 0.1 percent or P8 billion from the previous month.

Year-on-year, the state’s debt rose 5 percent, with domestic and external obligations increasing by 7.1 percent and 1.3 percent from their end-May 2013 level, respectively.

Domestic debt accounted for 66 percent of the total with the rest accounted for by external borrowings.

The month-on-month dip in the government’s debt followed the Treasury’s decision to reject bids for P12 billion in short-term treasury bills at an auction on May 5. Banks buying bills at that time wanted higher rates. The government’s auction committee felt the bids were “wrongly priced.”

At the same auction, the Treasury issued P8 billion in 91-day bills, with banks willing to take on lower returns.

Domestic debt increased by half a percent in May over April on the back of net issuances. Meanwhile, external obligations were down 1.4 percent due to net repayment and the strengthening of the local currency against the greenback, which lowered the peso value of debt.

Total national government-guaranteed debt amounted to P464 billion, which was 0.8 percent lower month-on-month.

“This is primarily due to the reduction in external guaranteed obligations from net repayments and currency adjustments,” the Treasury said.

Domestic guaranteed obligations also decreased slightly due to repayments during the period. Year-on-year, total guaranteed obligations decreased by 3.1 percent. Paolo G. Montecillo