PH debt stock eased to P15.55 trillion in August

The Philippine government’s debt decreased to P15.55 trillion at the end of August, thanks to a strong local currency and the net repayment of external debt, the Bureau of the Treasury (BTr) said on Tuesday.

BTr data showed that total state obligations went down by P139.79 billion in August, less by 0.9 percent from P15.69 trillion recorded in the previous month.

Compared with a year earlier, the debt stock increased by 8.4 percent, or an additional P1.2 trillion-debt.

Domestic borrowings, which accounted for about seven-tenths of the total debt, increased by 0.4 percent to P10.79 trillion in August compared to July.

The increase was driven by the issuance of government securities totaling P45.05 billion. However, this was partially offset by a P6.59-billion downward revaluation due to the stronger peso against recently issued US dollar-denominated securities.

In August, the Marcos administration issued a $2.5-billion US dollar-denominated bond through a triple-tranche offering.

This resulted in an increase of 7.7 percent or P773.68 billion since the start of the year.

Compared to last year, domestic debt rose by 10.2 percent or an addition of P1 trillion.

In August, the peso strengthened against the dollar, rising to P56.179 from P58.488 the previous month.

Meanwhile, outstanding external obligation, which comprised three-tenths of the total, dipped by 3.6 percent to P4.76 trillion.

The decrease was also attributed to the stronger peso, which reduced values by P194.90 billion, along with net repayments of P4.17 billion. However, stronger third currencies contributed P20.82 billion in positive valuation effects.

Since the start of this year, external debt has increased by 3.5 percent or P160.25 billion.

“This could be partly attributed to higher matured national government debt or repayment of some matured debts that effectively reduce the [national government’s] outstanding debt stock,” Michael Ricafort, chief economist at Rizal Commercial Banking Corp. told Inquirer.

Ricafort said that stronger peso also led to the reduced peso equivalent of the government’s outstanding foreign debts.

He added that, in the coming months, the state’s debt stock is expected to decrease further if the local currency continues to strengthen.

The economist said a continuing appreciation of the peso would lower the amount needed to pay off debts, provided that the budget deficit also decreases.

The national government’s budget deficit narrowed by 59.24 percent to P54.2 billion in August amid a modest decline in state spending.