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MANILA, Philippines—As the national government allowed billions of pesos in short-term IOUs to mature in November without replacing them with new borrowings, its debt stock slightly declined to P11.93 trillion at the end of the first 11 months.
The latest Bureau of the Treasury data on Wednesday (Dec. 29) showed end-November outstanding debt was 0.3-percent smaller than the record-high P11.97 trillion last October.
However, the debt pile was 17.7-percent bigger than the P10.13 trillion recorded in November 2020.
In its report, the Treasury said domestic debt, which accounted for the bulk or 70.7 percent of total, declined 0.3 percent month-on-month to P8.44 trillion due to “net redemption of government securities” or the maturity of T-bills and bonds.
The Inquirer earlier reported that outstanding locally issued debt paper declined to P7.9 trillion in November from October’s record P7.93 trillion, on the back of more T-bill maturities, as the government wanted to end 2021 with a debt-to-gross domestic product (GDP) ratio below 60 percent.
The remainder of outstanding domestic obligations was the P540-billion zero-interest loan from the Bangko Sentral ng Pilipinas (BSP), which the Treasury repaid last Dec. 10, ahead of maturity on Jan. 12, 2022.
For next year, the national government requested a smaller P300-billion liquidity support from the BSP amid an improving economic outlook following reopening of more productive sectors from stringent COVID-19 restrictions.
But year-on-year, domestic debt jumped 17.4 percent from P7.19 trillion in November last year.
Outstanding foreign debt also declined month-on-month by 0.4 percent to P3.49 trillion, partly due to the stronger peso.
The peso, which closed November at 50.384:$1 from 50.552 vs. the greenback in October, slashed debt by P11.64 billion, on top of the P4.05-billion reduction in obligations denominated in other foreign currencies which also strengthened against the US dollar last month.
The impact of the peso’s appreciation offset the P2.9 billion in net foreign borrowings in November, the Treasury said.
The end-November external debt, however, climbed by a faster 18.6 percent year-on-year, from P2.94 trillion last year.
As the national government’s outstanding debt climbed by a faster 27.2 percent year-on-year than the 4.9-percent average economic growth during the first nine months of 2021, end-September debt-to-GDP rose to a 16-year high of 63.1 percent — beyond the 60-percent threshold which debt watchers deemed as manageable for an emerging market like the Philippines.
The government targets a debt ratio of 59.1 percent by end-2021, which will nonetheless still be the highest since the 65.7 percent posted in 2005.