Gov’t debt hits new high of P15.48T in June

(FILE PHOTO)

Government debt rose to a fresh high of P15.48 trillion at the end of June, fueled by increased borrowings here and abroad plus the impact of the weaker peso, the Bureau of the Treasury (BTr) said on Tuesday.

BTr data showed that total state obligations increased by P135.90 billion in June, higher by 0.9 percent from the previous month.

Compared with last year, the debt load grew by 9.4 percent or P1.335 trillion as of end-June.

READ: Gov’t debt hits record high of P15.35T

The BTr attributed the increase “to the net issuance of both domestic and external debt and the effect of peso depreciation.”

The peso weakened by 13 centavos to 58.658 against the greenback as of end-June.

Domestic borrowings, which accounted for 68.29 percent of the total debt, increased by 1.2 percent to P10.57 trillion in June. The increase was driven by the P129.9 billion net issuance of government securities while the P39 million came from the effect of peso depreciation on foreign-currency denominated domestic debt.

Revenue boost

These resulted in an increase of 5.5 percent or P555.19 billion since the start of the year. Compared to last year, domestic debt rose by 9 percent or an addition of P870.29 billion.

Outstanding external debt increased by 0.1 percent to P4.91 trillion in June, adding P5.62 billion. The rise was due to P7.95 billion in net borrowing and an P11.23-billion revaluation of dollar-denominated debt because of peso depreciation. However, this was partially offset by a P13.56-billion reduction from favorable adjustments in other currencies.

Robert Dan Roces, chief economist at Security Bank Corp., said the government may need to boost revenue through efficient tax collection and prioritize economic growth to increase its capacity to repay debt.

The government set the debt-to-Gross Domestic Product (GDP) ratio at 60.6 percent this year, slightly above the 60 percent that lenders deem manageable for developing economies. For the first quarter, the debt-to-GDP ratio placed at 60.2 percent.

The government raised its borrowing program by 4 percent to P2.57 trillion for this year. INQ