End-August gov’t debt rises to P5.9T

The amount of the national government’s outstanding debt inched up to P5.9 trillion as of end-August mainly due to a weaker peso.

The latest Bureau of the Treasury data showed a slight increase in the government’s outstanding obligations by 0.9 percent from P5.85 trillion in end-July.

The end-August figure was 3.2-percent higher than the P5.71 trillion recorded at the end of the first eight months of last year. This was despite the 0.1-percent decrease in domestic debt as of August to P3.86 trillion from P3.859 trillion a month ago.

The Treasury said there was a P550-million upward adjustment in the peso value of local dollar bonds due to US dollar appreciation.

The end-August domestic debt was nonetheless up 2.1 percent from P3.78 trillion last year.

The external debt at the end of the first eight months, meanwhile, rose by 2.7 percent to P2.04 trillion from P1.99 trillion in the previous month.

“The expansion of external obligations was due to the combined impact of the peso depreciation on third currency and dollar-denominated debt increasing by P6.1 billion and P47.96 billion, respectively. This was slightly tempered by net repayments worth P890 million,” the Treasury said.

On a year-on-year basis, foreign debt increased by a faster 5.5 percent from P1.94 trillion at end-August last year.

As for the national government’s outstanding guaranteed debt, these grew by 2.5 percent to P412.9 billion as of August from P402.6 billion in the previous month.

As of August, the outstanding guaranteed domestic debt amounted P105.7 billion, lower by 0.2 percent month-on-month as well as 19.2-percent lower year-on-year.

Guaranteed foreign debt in end-August reached a higher P307.2 billion, up 3.5 percent from a month ago but down 5.9 percent from last year.

This year, the Cabinet-level, interagency Development Budget Coordination Committee (DBCC) had programmed a borrowing mix of 75-percent domestic, 25-percent external “as ample domestic liquidity will allow the government to source majority of its financing needs from domestic market,” it said in its midyear report.

“For the rest of 2015, the national government will borrow predominantly in local currency to meet its funding requirements, in line with the goal of reducing the country’s exposure to foreign currency volatility as well as the long-term objective of developing the domestic capital market,” the DBCC said.

The national government plans to borrow less next year and slash the debt stock to a record-low of 41.8 percent of the economy from the projected 44.7 percent this year.

A decade ago, the debt stock was at a high of 68.5 percent before being trimmed to below 50 percent of the gross domestic product (GDP) since 2013.

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