Gov't debt hits fresh peak in February as pandemic needs grow

MANILA, Philippines — The government's debt pile continued to grow in February to reach a new record-high on the back of ballooning pandemic expenses.

What's new

The government's outstanding liabilities stood at P10.4 trillion in February, the Bureau of the Treasury reported Monday. During that month alone, the state added P78.37 billion to its debt load.

In just two months, data showed debts accumulated by 6.2%.

Why this matters

Since the pandemic hit home in March last year, the Duterte administration has embarked on a borrowing spree to bridge a record-wide budget deficit as a result of dwindling tax collections while the country's pandemic needs grow. For the enture 2020, state debts swelled to P9.8 trillion, up 26.7% year-on-year and equivalent to 54.5% of gross domestic product.

For this year, the Cabinet-level Development Budget Coordination Committee has programmed a fiscal deficit of P1.78 trillion, equivalent to 8.9% of GDP.

What the government says

In a statement, the Treasury attributed the uptick in liabilities last month to "net financing from local and external sources" as well as "currency fluctuations" that bloated the value of offshore obligations.

By the figures

• Of the total debt stock as of February, 29% was sourced externally while a bigger 71% was lent by domestic creditors.
• Onshore liabilities grew 0.5% month-on-month in February to P7.36 trillion, which includes the availment of P540-billion loan from the Bangko Sentral ng Pilipinas. Year-to-date, local debts increased by 10%.
• External debt stood at P3.02 trillion last month, up 1.4% from the preceding month. Since January, foreign liabilities went down 1.9% after the government paid maturing debts.