Public sector debt hits P5.5 trillion as of September

MANILA, Philippines - The country’s outstanding public sector debt hit P5.5 trillion as of end-September 2009, 7.1 percent higher than the P5.132 trillion recorded in the same period last year as the government continued to borrow from local and foreign lenders, latest data from the Department of Finance (DOF) showed.

The latest figure is equivalent to 72.9 percent of gross domestic product (GDP). The ratio is lower than the 74.7 percent ratio recorded as of end-June 2009.

Despite the increase in the end-September 2009 outstanding public sector debt, the latest figure showed a decline from the end-June 2009 level.

The P5.5-trillion debt represents a decrease of 2.1 percent or P118.6 billion from the end-June 2009 level of P5.6 trillion.

Of the amount, domestic debt of the public sector decreased by 4.2 percent for a total of P2.5 trillion while total foreign debt slightly decreased by 0.3 percent to P3 trillion.

The foreign debt stock of the 14 monitored non-financial government corporations decreased by 5.6 percent during the period.

Likewise, the decline in the liabilities of both the Bangko Senral ng Pilipinas (BSP) and the Government Financial Corp. by 0.5 percent and 4.4 percent, respectively, resulted in the lower debt ratio of the financial public sector.

The financial public sector includes the BSP and government financial institutions such as the Land Bank of the Philippines, Development Bank of the Philippines and Tidcorp or the Philippine Export Import Credit Agency.

The non-financial public sector debt, meanwhile, stood at P4.6 trillion or equivalent to 60.8 percent of GDP. This amount represents an increase of 1.2 percent from the end-June 2009 level of P4.5 trillion.

The non-financial public sector includes the government-owned and controlled corporations such as the National Food Authority, National Power Corp., the National Irrigation Administration and the National Tobacco Administration.

In terms of the profile of the outstanding public sector debt, DOF data showed that 54.2 percent is owed to foreign creditors while the remaining 45.8 percent is owed to domestic creditors of the public sector.

The government has been trying to trim its debts through prudent management of state-owned agencies.