Gov’t debt stock hit record high in January

The government’s outstanding debt hit P6.115 trillion, a record high, in January as the government sold more debt paper to finance infrastructure expenditures.

The latest Bureau of the Treasury data showed that the end-January outstanding liabilities rose 0.4 percent from end-2016’s P6.09 trillion. It was 3.6 percent higher than the P5.9 trillion in the same month last year.

The Treasury attributed the month-on-month increase to “domestic net issuance and the impact of third currency appreciation on foreign currency denominated debt.” It said 65 percent or P3.953 trillion of the outstanding debt was borrowed from domestic sources.

Domestic debt increased 0.5 percent month-on-month as “net issuance of government securities was worth P19 billion while the stronger peso reduced the value of onshore dollar bonds by a mere P10 million,” the Treasury said.

The Treasury noted that the peso slightly appreciated to 49.757:$1 in January from December 2016’s foreign exchange of 49.769:$1.

Foreign debt also inched up 0.3 percent to P2.162 trillion “due to the impact of third currency appreciation against the US dollar amounting to P14.04 billion outpacing net repayment and peso appreciation worth P7.46 billion and P520 million, respectively,” the Treasury explained.

To recall, the government had raised to P180 billion the total amount it would borrow domestically in the first quarter through the sale of T-bills and T-bonds, with the Treasury also returning to weekly auctions instead of just twice a month.

As domestic interest rates remained relatively low, the Duterte administration wanted to finance its programmed budget deficit equivalent to 3 percent of the gross domestic product in the next six years through a borrowing mix of 80 percent local and 20 percent foreign.

National Treasurer Rosalia V. De Leon earlier said the government was “in the right trajectory in terms of meeting the [2017 borrowing] mix.” —Ben de Vera