Philippines: Government debts climb to P12.68T in March as borrowing spree continues
MANILA, Philippines — The government capped the month of March with a heavier debt burden, as the Duterte administration continued its pandemic-led borrowing spree to fund a large budget deficit.
The state’s liabilities amounted to P12.68 trillion in March, up 4.8% month-on-month, the Bureau of the Treasury reported Tuesday.
Explaining the ascent, the Treasury said the government incurred new debts from the sale of government securities at home and abroad. Data showed obligations have accumulated by P951.2 billion since the beginning of the year.
The continued growth of pandemic-induced debts have already alarmed some credit rating agencies. To be fair, the increased borrowings were necessary to fund the state’s coronavirus response.
Last month, Finance Secretary Carlos Dominguez III said the economy would have to grow over 6% in the next five to six years to reduce the debt stock, which already accounted for 60.5% of the country’s gross domestic product in 2021, the highest in 16 years. Analysts believe this would be a big challenge for the next administration.
Broken down, local borrowings, which accounted for 69.9% of the total debt load, amounted to P8.87 trillion in March, up 5.4% compared to the preceding month following the sale of Retail Treasury Bonds and debt exchange transaction at the time.
Offshore liabilities, meanwhile, grew 3.6% month-on-month in March to P3.81 trillion. The Treasury said the increase was due to proceeds from the government’s P117.33-billion triple tranche Global Bonds offer and a weak peso, which bloated the value of foreign debts by P37.31 billion.
Figures from the Budget department showed the Duterte administration is planning to borrow P3 trillion in 2022 to bridge its budget deficit, which would put the debt load at P13.4 trillion by the end of the year. — Ian Nicolas Cigaral