Government debt further swells to P7.195 trillion in November 2018

MANILA, Philippines — The national government’s outstanding debt continued to rise, reaching another all-time high of P7.195 trillion as of end-November 2018 as the government issued more domestic securities than those it redeemed, the Bureau of the Treasury reported yesterday.

According to the latest data from the BTr, the national government’s debt pile as of end-November last year was 0.4 percent, or P27.94 billion, higher than the P7.167 trillion recorded a month ago.

This is also 11.8 percent higher compared to the P6.437 trillion posted in the same month in 2017.

Of the government’s total debt stock, the BTr said the bulk or 65.4 percent was borrowed domestically, while the remaining 34.6 percent was sourced externally.

Domestic debt as of November amounted to P4.708 trillion, 1.9 percent higher than the end-October 2018 level of P4.62 trillion.

“For the month, the registered increase in domestic debt was due to the net issuance of government securities amounting to P88.33 billion as the committee fully awarded Treasury bonds amid strong market demand,” the BTr said.

“This was slightly offset by the appreciation of the peso, which decreased the value of onshore dollar bonds by P570 million,” it said.

On the other hand, the national government’s external debt stock as of end-November declined by 2.3 percent to P2.487 trillion from P2.547 trillion a month ago.

The BTr attributed the decrease to the impact of the stronger peso which lowered external debt by P54.15 billion, along with net repayments on foreign obligations amounting to P5.89 billion.

This was slightly tempered by the net appreciation of third-currency denominated external debt amounting to P210 million, the bureau said.

Meanwhile, the BTr said the national government’s total guaranteed obligations as of end-November declined by 2.7 percent to P471.8 billion compared to P484.71 billion the previous month.

The BTr said the reduction in guarantees was due to the impact of currency fluctuations on both dollar and third-currency denominated external guarantees amounting to P6.22 billion and P750 million, respectively.

Net redemptions of domestic guarantees also amounted to P6.08 billion, offsetting the P130 million net availments of external guarantees.

From the end-December 2017 level, national government guarantees decreased by P6.31 billion or 1.3 percent.

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‘s borrowing program was set at P986 billion. This is expected to rise 20 percent to P1.19 trillion this year in expectation of the higher fiscal deficit.