Stronger peso reduces outstanding debt in May

AFP FILE PHOTO

MANILA — A stronger peso in May reduced the national government’s outstanding debt to P6.345 trillion at the end of the first five months, the latest Bureau of the Treasury data released Monday showed.

In a statement, the Treasury said the end-May figure was down 0.4 percent from P6.37 trillion a month ago although up 7.8 percent from P5.886 trillion a year ago.

Domestic debt, which accounted for almost two-thirds of the total, declined 0.5 percent month-on-month to P4.137 trillion “primarily due to the net redemption of government securities amounting to P22.7 billion and a stronger peso that reduced the value of onshore dollar bonds,” the Treasury explained.

Based on Treasury data, the peso appreciated to 49.761:$1 last May from 49.9:$1 in April.

But compared with a year ago, end-May domestic debt rose 9 percent from P3.797 trillion in 2016.

Foreign debt also declined 0.1 percent month-on-month to P2.208 trillion, which the Treasury attributed to “the combined effect of stronger peso and net repayments of foreign obligations amounting to P7.07 billion.”

The Treasury said the reduction in external debt had offset a P4.78-billion upward revaluation in third currency-denominated debt.

Year-on-year, external debt increased 5.7 percent from P2.088 trillion as of end-May last year.

As for guaranteed obligations of the national government, these decreased by 0.3 percent month-on-month to P493.6 billion in May mainly because of “net repayments of domestic guarantees amounting to P2.57 billion alongside the P800-million effect of peso appreciation on foreign guarantees” that offset P380 million in net availments as well as P1.53 billion in third current revaluation.

Compared with last year, the national government’s end-May outstanding guaranteed debt dropped by a faster 11 percent from P554.6 billion.  SFM