THE National Government’s (NG) total outstanding debt stood at P9.369 trillion at the end of September, 2.6% down from the previous month after the repayment of its short-term loan from the Bangko Sentral ng Pilipinas (BSP).

The Bureau of the Treasury (BTr) said in a report on Thursday the debt stock was P246.15 billion lower than the end-August figure. However, this was 18% higher than the P7.91 trillion logged in September last year, as the government continued to fund measures to fight the coronavirus disease 2019 (COVID-19) pandemic.

The BTr last month repaid the P300 billion it borrowed from the BSP in March through a repurchase agreement of government securities.

As of September, the National Government’s total outstanding debt consisted of 69% domestic funds and 31% external debt.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort attributed the month-on-month decline to a slowdown in government spending, including the disbursement of the second tranche of the stimulus under Republic Act No. 11494 or Bayanihan to Recover As One Act.

“Monthly easing of government debt may reflect 15.5% year-on-year decline in government spending for the month of September that reduced the need for more borrowings due to higher bases, as well as some low-level utilization of the Bayanihan II Law funds,” he said in an e-mail.

Domestic debt reached P6.44 trillion as of end-September, declining by 4% or P274.6 billion compared with the end-August level due to debt repayment.

However, this was 22% higher than the P5.26 trillion recorded in September 2019 due to an increase in the issuance of government securities.

External debt reached P2.93 trillion, up by 1% from P2.90 trillion in August and jumping by 11% from P2.65 trillion in September last year.

“For September, the increment to the external debt portfolio was attributed to the P33.22-billion net availment of external loans. Meanwhile, currency fluctuations on both US dollar and third-currency denominated foreign loans trimmed P3.65 billion and P1.08 billion, respectively, from the peso value equivalent,” the Treasury said.

Mr. Ricafort said the government could further tap the foreign debt market to fund other relief measures against COVID-19 if necessary.

“The Philippine external debt-to-GDP ratio is much lower at 23.7% as of the second quarter of 2020, relatively compared with similarly rated countries, thereby also giving the government greater leeway to increase foreign borrowings while managing foreign exchange risks that may entail,” he said.

Total NG guaranteed loans slightly dipped by 0.4% month on month to P445.4 billion in September, due to lower net redemption of local and external guarantees.

“Local currency appreciation further reduced the value of external guarantees by P0.27 billion, offsetting the effect of third-currency appreciation amounting to P0.42 billion,” the Treasury said.

The Development Budget Coordination Committee projected outstanding debt to balloon to a record P10.16 trillion or 53.9% of gross domestic product (GDP) by end-2020.

The government plans to borrow P3 trillion this year to plug its budget deficit, seen to hit 9.6% of GDP. — KKTJ

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