MANILA, Philippines - The government’s outstanding debt rose three percent to P5.76 trillion at the end of February due to higher borrowings from the domestic market, the Bureau of the Treasury reported.
Month-on-month, the government’s outstanding debt was also higher than the P4.93 billion recorded in January.
Latest data from the BTR showed that 66 percent or P3.83 trillion of the total outstanding debt comprised peso-denominated liabilities. This represented an increase of five percent from a year ago.
The Aquino administration continued to step up domestic borrowings to manage foreign exchange risk and develop the capital market while taking advantage of ample domestic liquidity
Domestic borrowings are done primarily through the issuance of government securities such as Treasury bills and bonds.
The balance of P1.93 trillion was sourced from foreign creditors, booked in foreign currencies such as the dollar, euro and yen. The a mount is slightly lower than the previous year’s P1.95 trillion.
Apart from loans extended by multilateral institutions and official aid from foreign governments, the Philippines also borrows overseas through the sale of bonds.
Among the country’s biggest providers of official development assistance are the World Bank, Asian Development Bank and Japan International Cooperation Agency.
Obligations guaranteed by the government amounted to P414 billion, down 12.8 percent or 61 billion year on year.
The country’s debt as a proportion of the country’s whole economy declined further last year, reflecting the government’s successful efforts to manage finances and sustain the growth of the economy.
Debt-to-GDP (gross domestic product) ratio improved to 45.4 percent at the end of December 2014 from 49.2 percent the previous year as a result of efficient spending.
The debt-to-GDP ratio, which peaked at 78.1 percent during the 1998 Asian currency crisis, has been on a downward trajectory in the past three years as the government stepped up efforts to manage the country’s debt.