Government debt climbs to P7.16 billion in Sept.

By Elijah Joseph C. Tubayan, Reporter
THE government’s total outstanding debt grew in September due to the weaker peso, the Bureau of the Treasury (BTr) said.
The total debt stood at P7.16 trillion as of September, up 11.1% from P6.44 trillion in the same period last year.
It also inched up 0.8% from the P7.10 trillion recorded in the previous month.
64.08% of the total were borrowed locally, while 35.92% were from external sources, well within this year’s 63-35 target borrowing mix favoring domestic lenders.
The national government’s local debts stood at P4.59 trillion, 9.5% higher than the P4.19 trillion last year, and a 0.3% increase from August.
“For the month, the increase in domestic debt was due to the net issuance of government securities amounting to P14.54 billion and the depreciation of the peso that increased the value of onshore dollar bonds by P0.31 billion,” the BTr said.
The BTr quoted the peso at P54.102 per dollar in September, weaker than the P53.475 in August and P50.83 versus the greenback in September 2017.
Meanwhile, external debt amounted to P2.57 trillion in the January-September period, 14% higher than P2.26 trillion logged in the same nine months last year, and 1.6% higher than the end-August level.
“The increment in external debt was due to net availments of foreign loans amounting to P22.52 billion and the P29.68 billion impact of local currency depreciation against the US dollar,” the BTr explained.
“This was slightly offset by the net depreciation of third-currency denominated debt amounting to P11.13 billion,” it added.
The government borrows from local and foreign sources to fund its budget deficit, which for this year is capped at 3% of the country’s gross domestic product.
This year, the government has widened the share of foreign debt from 20% last year as it seeks to take advantage of favorable interest rates currently before it increases further next year, as projected.
The government expects the debt as a share to the economy to decline from 42.6% in the first quarter this year to 38.6% by 2022.