Philippines: NG debt up 1.8% to P6.09 T as of Aug

The outstanding debt of the national government breached the P6-trillion mark for the first time in end-September due to the weakening of the peso against the dollar, the Bureau of the Treasury said.

The government’s debt stock as of end-September hit P6.09 trillion up 1.8 percent from end-August. Since end-2015, debts already rose 2.2 percent from P5.95 trillion.

Obligations are compared every month than year-on-year since they add or subtract to an existing pile.

“NG debt portfolio grew…due to foreign currency revaluation and domestic net issuance,” the Treasury said in a statement.

Broken down, the bulk of obligations were still domestic in nature, which inched up 0.5 percent to P3.904 trillion, data showed. The increase came from higher issuance of securities.

In particular, debt papers went up to P3.903 trillion from P3.88 trillion. Treasury bonds and bills, paid with interest at specific periods, are issued twice a month to local investors to borrow money.

The balance of P598 million, which was steady from previous month, was in the form of loans from both the central government and agencies.

However, a bigger increase was recorded in external liabilities “attributed to the depreciation of the peso against the dollar and third currencies,” BTr said.

This, in turn, raised the peso value of these debts and “offset net repayments” of foreign debts during the period. 

External obligations rose 4.1 percent to P2.18 billion. The magnitude of increase was nearly similar to the 4.12-percent depreciation of the peso against the greenback for the month.

The local currency ended September at 48.5:$1. Treasury used 48.482:$1 foreign exchange rate in computing for debts.

Broken down, external loans rose 4.6 percent to P844.81 billion, while foreign-denominated securities increased 3.8 percent to P1.34 trillion.

Meanwhile, the peso’s decline also affected the amount of debts guaranteed by the government, which increased two percent to P564.95 billion, separate figures showed.

“The adjustment is due to the combined effect of US dollar-…and third currency adjustments…that increased the peso value of external guarantees,” Treasury said.