Gov’t debt burden nears P5-T mark

The government’s debt burden rose to P4.93 trillion as of November, up P34 billion or 0.7 percent from the October level largely due to a net issuance of domestic securities and the weakening of the peso. This was also 4.5 percent higher than the P4.719 trillion recorded in November 2010.

With the latest population estimate at 95.6 million, the amount of total outstanding debt would mean that each citizen has a share of P51,594.

Documents from the Bureau of the Treasury showed that 58 percent or P2.85 trillion of the government’s outstanding debt was borrowed from domestic lenders.

Local debt increased by P14.9 billion or 0.5 percent from the P2.84 trillion posted in October.

The increase was attributed to the government having issued more local debt paper compared to the volume that was redeemed.

On the other hand, 42 percent or P2.08 trillion of total outstanding debt was booked in foreign currencies such as the dollar as well as the euro and yen.

Aside from loans extended by multilateral lenders and official aid from foreign governments, the Philippines also borrows abroad through the issuance of bonds denominated in these currencies.

Foreign borrowings increased by P19.1 billion or 0.9 percent from the P2.06 trillion owed to overseas lenders in October.

The increase in foreign debt was due mainly to the depreciation of the peso against the dollar, which added P46 billion to the debt stock.

On the other hand, the depreciation of the yen and the euro against the dollar helped drive total obligations downward, shaving off P22 billion from the debt stock. Also, government payments in October were P5 billion more than the inflow of new debts.

In November, government debt paper pegged in dollars amounted to an equivalent of P1.03 trillion while yen and euro loans stood at P84.2 billion and P29.2 billion, respectively.

The government’s total contingent debt—composed mainly of sovereign guarantees—went down by P870 million or 0.2 percent to P578.7 billion.

The increase was attributed mainly to net repayments as well as the combined weakening of the peso, yen and euro against the dollar.