Gov’t liabilities at end-2016 still above P6T on fluctuating peso

The weaker peso toward yearend kept the national government’s outstanding debt above the P6-trillion level at the end of 2016, the latest Bureau of the Treasury data showed.

In a statement, the Treasury said the national government’s end-2016 liabilities slightly declined by 0.24 percent month-on-month from the record high P6.105 trillion in November, staying above the P6-trillion mark for the fourth straight month.

The month-on-month decline in December, which reversed the increase last November, was attributed by the Treasury to “currency fluctuations and net repayment on domestic securities.”

Year-on-year, the end-2016 figure was up 2.3 percent from P5.96 trillion in 2015, Treasury data showed.

Domestic debt grew 1.3 percent year-on-year to P3.93 trillion but decreased by 0.1 percent month-on-month because of net repayments, the Treasury added.

The amount owed to domestic creditors at end-2016 accounted for the bigger 65 percent of the total.

Foreign debt, meanwhile, rose 4.2 percent year-on-year to P2.16 trillion even as the December figure declined 0.4 percent from November “due to the impact of third-currency depreciation against the US dollar amounting to P9.28 billion and net repayment of P1.3 billion, counteracting the P960-million effect of peso weakening against the US dollar.” The peso stayed at the higher end of the 49:$1 level in December.

While the end-2016 nominal debt figure was higher than in 2015, its share to the gross domestic product (GDP) dropped to 42.1 percent from 2015’s 44.7 percent. The GDP expanded 6.8 percent in 2016, faster than the rate of increase in the national government’s outstanding debt.

“The lower debt-to-GDP ratio, a usual measure of sustainability, is due to the moderate increment in debt as a result of prudent cash and debt management, lower deficit and steady economic growth,” the Treasury said.

The national government’s total guaranteed obligations, meanwhile, declined 5.8 percent year-on-year to P513.66 billion at end-2016.

“Month-on-month, guaranteed debt decreased by 3.5 percent due to net repayment on both domestic and external guarantees amounting to P14.76 billion and the impact of third currency depreciation against the US dollar amounting to P3.8 billion. These reversed the effect of the peso depreciation that raised the peso value of guarantees by P130 million,” according to the Treasury.