(Updated, 1:14 p.m., January 30)
Government debt jumped to a new high of P7.293 trillion in 2018 but its share to the gross domestic product (GDP) declined amid sustained economic growth.
In a statement, the Bureau of the Treasury said the government’s end-2018 outstanding debt rose 9.6 percent from P6.652 trillion in 2017.
While the nominal amount continued to increase, the debt-to-GDP ratio in 2018 slightly dropped to 41.9 percent from 42.1 percent in 2017.
“The lower debt-to-GDP ratio is due to the moderate increment in debt as a result of prudent cash and debt management and steady economic growth,” the Treasury said.
The GDP grew by 6.2 percent in 2018, a three-year low amid high consumer prices as well as sluggish agriculture and manufacturing, but still among the fastest growth rates in emerging Asia.
While it intends to borrow more to finance priority programs and projects, especially infrastructure, the Duterte administration expects a steady decline in the debt-to-GDP ratio to 38.8 percent by 2022 as economic growth is seen outpacing the increase in borrowings.
Of the end-2018 outstanding obligations, domestic debt accounted for 65.5 percent, reflecting the government’s bias for domestic borrowings through the sale of Treasury bills and bonds.
Domestic debt rose 7.6 percent year-on-year and 1.5 percent month-on-month to about P4.78 trillion.
The Treasury attributed the month-on-month rise in locally sourced obligations to “the net issuance of government securities amounting to P68.79 billion and peso depreciation that increased the value of onshore dollar bonds by P80 million.”
The Treasury noted that the peso slightly weakened to 52.563:$1 in December from 52.389 in November.
Foreign debt grew by 13.8 percent year-on-year and 1.2 percent month-on-month to P2.516 trillion.
In December alone, the Treasury said “foreign exchange fluctuations on both dollar and third-currency denominated debt contributed the biggest increment to external debt amounting to P8.26 billion and P14.33 billion, respectively, along with net availment of foreign loans that added P6.02 billion.”