RP debt seen to hit P5.042 trillion next year

MANILA, Philippines - The National Government’s debt is expected to hit P5.042 trillion next year, higher than the P4.737 trillion projected for this year as the government continues to borrow to plug a widening budget gap.

However, as a percentage of gross domestic product (GDP) or the economy’s total output, the debt stock is projected to go down to 55.7 percent from the 57 percent projected for the year, according to the latest estimates from the interagency Development Budget Coordination Committee (DBCC), the group that sets the country’s macroeconomic assumptions.

The debt stock, as a percentage of GDP is expected to go down because the country’s economic output, in nominal terms is projected to expand to P9.045 trillion from the P8.316 trillion projected for this year.

Of the P5.042 trillion estimated debt stock next year, P2.926 trillion will be owed to domestic lenders and P2.115 trillion will be owed to foreign creditors, estimates from the DBCC showed.

Furthermore, for the projected debt stock this year of P4.737 trillion, P2.694 trillion will be owed to local creditors and P2.042 trillion will be owed to foreign lenders.

Against this backdrop, the government is projected to spend P1.7 trillion next year from a budget of P1.619 trillion for this year.

As of end-May, the government’s outstanding debt rose by 2.7 percent to P4.554 trillion from the end-April level of P4.436 trillion, latest data from the Bureau of the Treasury (BTr) showed.

Of the total debt, the government owed P2.583 trillion or 57 percent to domestic creditors and P1.971 trillion is owed to foreign lenders, data also showed.

The government’s domestic debts increased by P35 billion or 1.4 percent from the end-April level as the Treasury issued more bills and bonds during the period.

On the other hand, foreign debt rose by P83 billion or 4.3 percent, mainly due to the appreciation of the peso against the dollar as well as the appreciation of other third currencies against the dollar.

Over the past years, the government has been trying to manage its liabilities including the issuance of guarantees.

It hopes to lengthen maturities and increase the government’s peso-denominated borrowings to protect the economy from foreign exchange fluctuations.