Gov’t debt burden swells to P 6.44T

As the government borrows more locally, the amount of outstanding IOUs it issued as of September rose to a new high of P6.44 trillion.

The latest Bureau of the Treasury data on Tuesday showed that outstanding bonds further increased to P5.56 trillion last month from P5.54 trillion in August.

Outstanding short-dated bills also inched up to P876.5 billion from P871.5 billion a month ago.

Amid flush domestic liquidity and low interest rates, National Treasurer Rosalia de Leon on Monday said local borrowings would suffice to raise more funds to be spent on COVID-19 response such that the Treasury would no longer issue panda and samurai bonds this year.

The government had programmed to borrow a gross amount of P3 trillion in 2020, of which P2.2 trillion will be sourced locally, to offset weak tax and non-tax revenues due to the COVID-19-induced recession.

In an Oct. 12 report, debt watcher Moody’s Investors Service noted that before the pandemic, the Philippines had a more recent track record of revenue growth exceeding that of GDP (gross domestic product).

“The authorities’ focus on tax reform in the years prior to the coronavirus crisis led this trend and contributed to improving debt affordability,” Moody’s said.

As of end-September, P136 billion of the outstanding treasury bills were from the sale of the benchmark 91-day; P204.9 billion from 182-day, and P535.6 billion from 364-day bills.

As for outstanding treasury bonds, three-year debt paper had a face amount of P198.5 billion; five-year IOUs, P316.8 billion; seven-year securities, P594.2 billion, and 10-year bonds, P568.7 billion.

The outstanding amount for 10-year agrarian reform bonds was P8.3 billion; 20-year IOUs, P420.3 billion; and 25-year debt paper, P235.9 billion. —Ben O. de Vera INQ