Government debt rises to record P7.17 trillion in October 2018

MANILA, Philippines — The national government’s debt pile rose to a new record high of P7.167 trillion as of end-October, driven largely by higher domestic borrowings, according to the Bureau of the Treasury.

Based on the latest BTr data, the debt figure was 0.10 percent or P7.3 billion higher than the P7.16 trillion recorded as of end-September and was also 10.24 percent higher than the P6.501 trillion registered in the same period last year.

Of the total outstanding debts, the bulk or 64.46 percent was borrowed domestically, while the remaining 35.54 percent was sourced from external lenders.

Domestic debt rose 0.71 percent to P4.62 trillion as of end-October from P4.588 trillion a month ago due to the  issuance of more government debt securities amounting to P32.74 billion.

“For the month, the registered increase in domestic debt was due to the net issuance of government securities amounting to P32.74 billion. This was slightly offset by the appreciation of the peso that decreased the value of onshore dollar bonds by P290 million,” the BTr said.

On the other hand, external debt went down by 0.98 percent to P2.547 trillion as of end - October from P2.572 trillion as of end - September

The BTr attribute the slight drop in external debt to the impact of peso appreciation amounting to P27.34 billion and the net payment of foreign debt, which reached P330 million.

The drop, however, was tempered by the net appreciation of third-currency denominated external debt totaling P2.52 billion.

Meanwhile, the Treasury said the national government’s total guaranteed obligations grew by 0.71 percent to P484.711 billion as of end - October from the previous month’s level of P481.303 billion.

The increase was attributed to the effect of the net appreciation of third-currency denominated guarantees, as well as the net availment of both domestic and external guarantees amounting to P6 billion and P10 million, respectively.

The BTr said it was partially offset by the impact of local currency appreciation equivalent to P3.48 billion.

The government borrows from both domestic and external lenders to plug the expected deficit in its budget, as well as to pay maturing debt.

For 2018, the national government is programmed to borrow P986 billion from local and foreign lenders. This is expected to rise by 20 percent to P1.19 trillion on expectation of higher fiscal deficit next year.