PH debt swelled further to P7.92T in end-Nov

Robust demand for long-dated treasury bonds last November further pushed up the national government’s outstanding debt to a new high of P7.915 trillion at the end of the first 11 months of last year.

In a report on Thursday, the Bureau of the Treasury said combined outstanding domestic and external obligations as of end-November 2018 rose 11.8 percent from P6.437 trillion a year ago and were up 0.4 percent from P7.167 trillion a month before.

Domestic debt, which accounted for almost two-thirds of the total, increased 11.9 percent year-on-year and 1.9 percent month-on-month to P4.708 trillion.

In a statement, the Treasury attributed the month-on-month increase in locally sourced obligations to “net issuance of government securities amounting to P88.33 billion as the committee fully awarded treasury bonds amid strong market demand.”

The rise in domestic debt was nonetheless slightly tempered by a stronger peso, which closed November at 52.389:$1 from 53.527 against the greenback last October, the Treasury noted.

In particular, the peso’s appreciation cut P570 million from the value of outstanding onshore dollar bonds, the Treasury said.

As for external debt, these grew 11.6 percent year-on-year to P2.487 trillion.

But compared with the previous month’s level, end-November foreign debt went down 2.3 percent, which the Treasury described as a “large” decline due to the stronger peso, which “relieved P54.15 billion along with net repayments on foreign obligations amounting to P5.89 billion.”

However, the net appreciation of third currency-denominated external debt worth P210 million slightly offset the drop in external obligations.

In its Fiscal Risks Statement 2019 report, the interagency Development Budget Coordination Committee (DBCC) said “public debt (national government) has remained broadly sustainable despite the higher borrowing requirement.”

“Alongside gains in risk metrics, the decreasing debt ratio (debt-to-gross domestic product) highlights the continued sustainability of outstanding obligation given strong growth. Furthermore, the prudent and proactive management of debt has moderated the sensitivity of the debt portfolio to adverse swings in foreign exchange and interest rates,” the DBCC added.