Debt stock rises to record P11.6 trillion

MANILA, Philippines — The country’s outstanding debt swelled to a new record high P11.61 trillion in end-July as the government stepped up its borrowing spree to finance its pandemic response.

Based on records from the Bureau of the Treasury, the debt stock jumped by nearly 27 percent or P2.44 trillion from P9.16 trillion a year ago on double-digit increases in obligations payable to onshore and overseas sources.

Domestic borrowings, accounting for roughly 70 percent of the amount, ballooned by close to 30 percent to P8.11 trillion on the government’s preference to borrow from the local market through the auction of securities.

Securities issued through auctions made up more than 93 percent of the domestic debt at P7.57 trillion, while loans given to state agencies accounted for the other seven percent at P540.15 billion. The Treasury said domestic debt grew by P181.04 billion on a monthly basis.

On the other hand, external borrowings rose by over 20 percent to P3.49 trillion as of end-July. Bonds issued abroad comprised roughly 58 percent of the amount at P2.01 trillion, while loans took the remaining 42 percent at P1.47 trillion.

According to the Treasury, foreign debt widened by P263.39 billion on a monthly level due to the addition of new external loans and issuance of US dollar-denominated global bonds.

The Treasury also reported guaranteed debt held by the government shrank by more than three percent to P444.307 billion as of end-July from P458.831 billion in end-July 2020, although this was an increase from the P438.6 billion recorded in the prior month.

The government expects the debt stock to reach an all-time high of P11.73 trillion this year. In a measure to finance the pandemic response, authorities look to borrow a sum of P3.07 trillion in 2021 on an 85:15 mix in favor of domestic sources.