Gov’t debt rises 2% to P5.72T
MANILA, Philippines–The Department of Finance (DOF) reported on Thursday that the share of the government’s debt to the gross domestic product (GDP) continues to shrink, mainly on the back of fewer borrowings alongside a growing economy.
This, even as data from the Bureau of the Treasury showed that government debt inched up by 2 percent to P5.723 trillion at end-September from P5.609 trillion in the same nine-month period last year.
The higher year-to-date national government debt was “driven by domestic net issuance and the impact of peso depreciation against the US dollar,” according to DOF.
In a statement on Thursday, the DOF also said that at end-March, the outstanding public sector debt worth P7.6 trillion was equivalent to 64.3 percent of the GDP.
Outstanding public sector debt refers to the liabilities of the national government alone.
The end-March ratio was 7 percentage points lower than the 71.3 percent level a year ago.
The national government likewise slashed by P79 billion its debt as of March from P7.7 trillion as of end-December last year.
The DOF attributed the lower national government debt to a P91.9-billion or a 1.7-percent decline in domestic borrowings, which outpaced the slight, 0.6-percent rise in foreign borrowings worth P12.9 billion.
According to the DOF, the “steep” drop in national government liabilities as of end-March was mainly brought about by the combination of “an increase in GDP levels” and “a decline in Bangko Sentral ng Pilipinas (BSP) borrowings due to the drop in regular and special deposit accounts.”
The DOF added that the lower debt was also a result of higher intra-sectoral holdings coming from national government and government-owned and controlled corporations’ deposits with government financial institutions (GFIs), national government securities held by GFIs and BSP, and GFIs’ deposits at BSP.
At end-March, the majority or 70.7 percent of the outstanding public sector debt were owed from local creditors.
As for the general government debt, which includes the outstanding liabilities of the national government plus debts of social security institutions and local government units, latest data showed that as of end-June, its share to the GDP slid to 37.3 percent from 44.3 percent in 2009, or before President Aquino assumed office.
The general government debt at end-June stood at P4.5 trillion, up 4.4 percent from P4.3 trillion a year ago.
“As public sector debt continues its downward trajectory, we are seeing how committing to prudent fiscal management has paved the way to ensure that future generations bear a lesser burden for our nation’s development,” National Treasurer Rosalia V. de Leon said in a statement.
