Govt debt accelerates to P8.89-T record high

The national government’s outstanding debt rose to an all-time high of P8.89 trillion at the end of May as it ramps up its domestic and external borrowings to fund its coronavirus disease 2019 (Covid-19) pandemic response, the Bureau of the Treasury (BTr) reported on Tuesday.

In a statement, the Treasury bureau said the amount was up by 3.4 percent or P290.53 billion from the P8.60 trillion in April.

It added that the acceleration “was primarily due to the increased reliance on government securities issuance and external loan availments to fund Covid-19 response amid a sharp drop in revenue collections.”

Of the total debt stock, 32 percent was generated from external creditors while 68 percent was raised domestically.

Domestic borrowings totaled P6.03 trillion, or 2.9-percent higher than the end-April figure of P5.86 trillion, while external debt increased by 4.4 percent to P2.85 trillion.

Outstanding debt last year was P7.91 trillion, of which P5.25 trillion was domestic while P2.65 trillion was foreign.

The BTr traced higher domestic obligations to “net issuance of domestic government securities.“

Meanwhile, net availment of external loans amounted to P114.01 billion as part of continued government efforts to secure financing for the Covid-19 response while local currency depreciation added P7.65 billion to the peso value of external obligations, it said.

Currency adjustments, on the other hand, trimmed P1.74 billion from the total foreign obligations, the bureau added.

A foreign exchange rate of P50.58 to the dollar was used for the latest data, compared with April’s P50.44:$1. The exchange rate used a year earlier was P52.22:$1.

On the other hand, government-guaranteed debt declined in May by 2.5 percent, or P11.80 billion, to P465.87 billion in April. It was 4.2 percent lower than last year’s figure.

“The lower level of guarantees was due to the net redemption of both local and foreign guarantees amounting to P10.79 billion and P0.73 billion (P730 million), respectively,” the Treasury bureau said.

This was further trimmed by currency adjustments, particularly third currencies, which reduced the value of external guarantees by P280 million, it added.