The national government’s debt stock reached P13.64 trillion as of end-October, up by 13.9 percent year-on-year.
This, according to the Bureau of the Treasury (BTr), was P123.9 billion or 0.92 percent higher than the P13.52 trillion in September and up by P1.91 trillion or 16.31 percent from the end-December 2021 level.
Both local and external loans increased in October. Domestic loans, which accounted for 68.58 percent of the total debt stock, climbed by P54.58 billion or 0.59 percent to P9.36 trillion from P9.30 trillion in September. The increase was attributed to the net issuance of government securities during the month amounting to P55.83 billion.
The rate of increase in domestic debt in October was slower than the 4-percent month-on-month rise in September.
Since the beginning of the year, however, domestic debt rose by P1.18 trillion or 14.5 percent due to continued preference for domestic financing to mitigate foreign currency risks, the BTr said.
External debt amounted to P4.28 trillion, reflecting an increase of P69.34 billion or 1.64 percent compared to the previous month.
The BTR said the increase in October was partly offset by the favorable net impact of both local and third currency fluctuations against the greenback, amounting to P43.07 billion and P6.30 billion respectively.
Year-to-date, the external debt has increased by P727.65 billion, equivalent to a 20.45 -percent rise, with the Treasury saying that this was due to local and third currency fluctuations during the period that increased the peso value of foreign denominated obligations.
Meanwhile, the total guaranteed obligations of the government decreased by P10.69 billion or 2.69 percent month-on-month to P3865.53 billion in the same month.
“The lower level of guaranteed debt was due to the net repayment of domestic guarantees amounting to P7.30 billion and the impact of currency fluctuation on both local and third currency denominated guarantees amounting to P2.20 billion and P1.79 billion, respectively,” the BTr said.
“These were slightly tempered by the net issuance of external guarantees amounting to P0.60 billion,” the Treasury added.
“In view of the large debt incurred of nearly P6 trillion since the pandemic started in 2020, the administration may still need to further intensify tax revenue collections based on existing tax laws, come up with new taxes or tax reform measures, increase tax rates, among others to further boost structural sources of government revenues,” Rizal Commercial Banking Corp chief economist Michael L. Ricafort said in a message sent to the Inquirer.
He added that the government might need to adopt more disciplined spending through fiscal reform measures, including the right-sizing in the government, as well as anti-corruption, anti-leakage, and anti-wastage measures.
Ricafort said these measures would help further narrow and improve the budget deficit and, in turn, slow the growth in the national government’s outstanding debt.