Gov’t debt rose to new record high of P16.92T

The debt load of the government went up in May to almost P17 trillion, although the accumulation of liabilities was tempered by the appreciation of the peso.

Latest data from the Bureau of the Treasury (BTr) showed the outstanding obligations of the state inched up by 0.99 percent month-on-month to P16.92 trillion.

Since the beginning of the year, debts have piled up by 5.41 percent or P867.58 billion.

“The minimal increase was primarily driven by the successful net issuances of new domestic securities, which reflect sustained investor confidence in the Philippine economy,” the BTr said in a statement.

“This was partially offset by the valuation effects of a stronger peso, helping reduce the value of external obligations,” it added.

Broken down, local debts—which accounted for 69.6 percent of the total outstanding borrowings—grew by 1.64 percent to P11.78 trillion in May.

The BTr said the government had borrowed P190.87 billion more than it paid back to domestic creditors during the month. But the increase was offset by the effect of a strong peso, which cut the local currency value of dollar-denominated domestic debts by P910 million.

Meanwhile, external obligations declined by 0.46 percent to P5.14 trillion. The BTr said the government had paid P3.55 billion more to foreign lenders than it borrowed during the month, contributing to the slump.

A relatively stable peso also cut the local currency equivalent of offshore liabilities by P29.35 billion. But this was partly offset by a P9.14 billion revaluation resulting from third-currency fluctuations against the US dollar.

See Also

SEC warns investors against ‘boiler room’ tactics

The BTr said it would continue to favor onshore sources of debt to mitigate any foreign exchange risks that may come with holding too much foreign obligations.

“This reflects the government’s strong bias for domestically sourced financing, which helps mitigate foreign exchange risks and strengthen the local capital market,” the Treasury said.

“The government remains committed to its prudent debt management strategy, ensuring borrowings are strategically aligned with fiscal objectives and overall macroeconomic stability,” it added.

This year, the Marcos administration is planning to borrow P2.6 trillion from local and foreign sources to plug a budget hole amounting to P1.6 trillion, or 5.5 percent of gross domestic product.