National debt surpasses P16 trillion mark in October

New record high

MANILA, Philippines — The peso’s depreciation pushed the country’s debt to breach the P16-trillion mark in October, a new record high in outstanding obligations, the Bureau of the Treasury (BTr) said.

Latest data from the Treasury showed that the national debt settled at P16.02 trillion as of end-October, the highest level to date. This is also 10.6 percent higher than last year’s P14.48 trillion debt.

For October alone, the government added a total of P126.95 billion to the debt pile due to the valuation impact of the peso’s depreciation against the dollar. Based on Treasury data, the peso weakened to 58.198 at end-October from 56.017 at end-September.

As of February, the outstanding debt was already 99.8 percent of the 2024 debt expectation of P16.06 trillion.

The Treasury said domestic borrowings accounted for the bulk or almost 67.98 percent of the debt pile, while the remaining 32.02 percent came from external sources.

Domestic debt rose by 10 percent to P10.89 trillion from P9.9 trillion in the same period a year ago. Month on month, it inched down by 0.4 percent from P10.94 trillion as of end-September.

“The decline was primarily due to the P52.65 billion net redemption of government securities, partially offset by the P6.23 billion escalation in peso conversion of dollar-denominated domestic debt brought about by the weakened peso,” the BTr said.

External obligations, on the other hand, jumped by 12.1 percent to P5.13 trillion from P4.58 trillion in the same period last year. It also rose by 3.5 percent from P4.96 trillion on a monthly basis.

The Treasury said the rise in foreign loans was due to availments totaling P20.47 billion, as well as foreign exchange movements, which added P152.9 billion to the external debt.

The impact of the peso’s depreciation also added P193 billion in external debt. However, this has been tempered by the P40.1-billion effect of favorable third-currency movements relative to the dollar.

Meanwhile, the government’s guaranteed obligations went up by 10.4 percent to P411.76 billion as of end-October from a month ago.

“This resulted from P35.85 billion in net availments of domestic guarantees and the P6.15-billion effect of peso depreciation against the US dollar, although partially attenuated by the P3.1 billion downward revaluation in external guarantees linked to third-currencies movements,” the BTr added.

The Treasury earlier said that aggressively lowering the country’s debt-to-gross domestic product ratio to pre-pandemic levels is impractical given the need to sustain public investments.

The share of national debt to the country’s output rose to 61.3 percent in the third quarter from 60.9 percent in the previous quarter.