PH debt stock hit new high of P12.76T in April

The national government’s debt stock increased yet again month-on-month, this time by 0.7 percent or P83.4 billion to P12.76 trillion at the end of April from P12.68 trillion at end-March, according to the Bureau of the Treasury (BTr).

The BTr said in a statement the further increase in the state’s outstanding debt was due to a net issuance of government securities—there were more new debts incurred than paid—as well as the weakening of the Philippine peso against the US dollar.

The latest population projection of the Philippine Statistics Authority, based on the 2015 census, suggests that there are now about 111 million Filipinos. This gives each Filipino a share of about P115,000 in the total debt.

Commenting on this, Rizal Commercial Banking Corp. chief economist Michael Ricafort said that the intensified tax collections from existing tax laws may not be enough.

“In view of the streak of record highs in the government’s outstanding debt in recent months, [the government] would inevitably require new tax/fiscal reform measures in [order] to curb additional borrowings by the government, especially for the incoming administration,” Ricafort said.

Based on the BTr’s latest monthly report, 70 percent or P8.94 trillion of the total debt was borrowed from domestic lenders.

Local debt rose by 0.8 percent or P67.2 billion from P8.87 trillion that was recorded in March.

There was an increase in domestic debt as new obligations surpassed debt payments by P66.3 billion.Of the total outstanding debt, government securities accounted for P8.64 trillion in April, up 0.8 percent from P8.57 trillion in March.

External lenders

Also, 30 percent or P3.83 trillion of total outstanding debt was owed to external lenders. The amount is P16.2 billion or 0.4 percent higher than the P3.81 trillion owed to foreign lenders as of March.

The BTr attributed the increase in foreign debt to P28.56 billion in net availments of loans as well as P31.5 billion in net depreciation of the peso against the US dollar.

On other hand, the increase was partially offset by P43.86 billion in concurrent adjustments for currencies other than the US dollar.

Aside from loans extended by multilateral lenders and official aid from foreign governments, the Philippines also borrows internationally through the issuance of bonds denominated in the US dollar, euro, Japanese yen and Chinese yuan.

As of the end of April, the government’s debt in dollar bonds was valued at a total of P1.72 trillion. There were also P223.59 billion worth of euro bonds, P82.76 billion in yen bonds and P19.75 billion in yuan bonds.

In addition, there are also P85.57 billion worth of peso-denominated global bonds.

Further, obligations guaranteed by the national government—including those incurred by the Land Bank of the Philippines and the Development Bank of the Philippines—increased to P413.43 billion in April, up by P2.38 billion or 0.6 percent from P411.04 billion in March.

Guaranteed domestic debt increased by P6.16 billion or 3.3 percent to P194.29 billion. On the other hand, guaranteed foreign debt decreased by P3.77 billion or 1.7 percent to P219.14 billion.