Gov’t debt stock eases to P14.93T

The national government’s total outstanding debt settled at P14.93 trillion as of the end of March, easing by 1.67 percent from the previous month’s level of P15.12 trillion, thanks to repayment of domestic government securities having surpassed new issuances.

The Bureau of Treasury (BTr) said on Thursday that 31.14 percent of the total debt stock is external, while the remaining 68.6 percent is domestic debt.

Domestic borrowings were pegged at P10.28 trillion, which was 2.83 percent lower than P10.58 trillion a month earlier.

The BTr said in a statement the decline resulted from the P299.45 billion net redemption of government securities offsetting the P240 million effect of peso’s depreciation on foreign currency domestic debt.

“Since the beginning of the year, domestic debt has increased by P259.56 billion or 2.59 percent,” the agency said.

Meanwhile, the external debt stock grew by 1 percent to P4.65 trillion.

“The increase resulted from the net availment of foreign loans amounting to P44.01 billion, as well as local currency depreciation which added to the valuation of US dollar-denominated debt by P7.05 billion,” the BTr said.

“This more than offset the P4.83 billion impact of the appreciation in third currencies against the US dollar,” it added.

Over the first quarter, foreign borrowings increased by 1 percent from P4.6 trillion at the end of 2023.

Meanwhile, the national government’s guaranteed obligations reached P346.04 billion, resulting in a 0.3 percent increase from the end of February.

Such increase “was due to the net availment of domestic guarantees amounting to P2.48 billion and the (P250-million) effect of local currency depreciation against the US dollar on external guarantees,” the BTr said.

In a report issued last April 9, Fitch Solutions unit BMI said they expect Philippine debt levels to ease over the coming years.

The BTr pegged the debt stock at 60.1 percent of gross domestic product (GDP) at the end of 2023. BMI puts it at 61.1 percent noting that it was a significant rise from the prepandemic level of 39.6 percent.

BMI also noted that President Marcos has “made a clear commitment” to reduce the budget deficit to 3 percent of GDP by 2028, down from the record-high 8.6 percent in 2021.

“However, we believe the deficit will likely miss the (3-percent) goal by a narrow margin given the tightrope between growth and maintaining fiscal stability,” it added. “We forecast a decline in the debt ratio to 52 percent by 2028.”