Debt eases to P15.55 trillion

MANILA, Philippines — The strengthening of the local currency and the repayment of external obligations eased the country’s outstanding debt to P15.55 trillion in August, the Bureau of the Treasury said.

Latest data from the Treasury showed that the national debt settled at P15.55 trillion as of end-August, cooling from the record-high P15.69 trillion a month ago.

Nonetheless, the figure is still 8.4 percent higher than the P14.35 trillion debt in the same month last year.

For August alone, the government slashed the debt level by P139.79 billion.

The Treasury attributed the decline to the revaluation effect of peso appreciation and the net repayment of external debt.

As of end-August, the outstanding debt stood at 96.8 percent of the 2024 debt expectation of a record P16.06 trillion.

The Treasury said domestic borrowings accounted for a majority or 69.4 percent of the debt pile while the remaining 30.6 percent came from external sources.

Total domestic debt at P10.79 trillion rose by 0.4 percent on a monthly basis due to the net issuance of government securities worth P45.5 billion.

This was partially offset by the P6.59 billion downward revaluation effect of peso appreciation on dollar-denominated domestic securities.

The local currency strengthened in August at P56.179 versus the P58.488 the month prior.

Toward the end of August, the local currency finished on a strong note at a five-month high against the greenback amid easing inflation.

Domestic debt, however, jumped by 10.2 percent from the P9.79 trillion in debt in August 2023.

External obligations, on the other hand, declined by 3.6 percent to P4.76 trillion month-on-month, but grew by 4.4 percent from P4.56 trillion on a yearly basis.

The Treasury said the monthly decline was brought about mainly by peso appreciation, which trimmed P194.9 billion, as well as net repayments of P4.17 billion.

Stronger third-currencies slightly offset the decline as it added P20.82 billion in valuation effects.

Further, the government’s guaranteed obligations increased by 5.6 percent to P364.03 billion, reflecting the Power Sector Assets and Liabilities Management Corp.’s availment of new guarantees worth P24.33 billion.

The escalation in the valuation of the third-currency denominated component of P1.38 billion also contributed to the increase while favorable peso movement provided a downward offset of P6.47 billion.