Outstanding government debt rose in January as the weaker peso drove up the value of the country’s foreign loans, the Bureau of the Treasury reported late Thursday, March 1.

National government debt totaled P6.726 trillion for the month, 1.1% higher than the P6.652 trillion tallied as of end-December. The debt stock also surged by a tenth from the P6.115 trillion owed in January 2017, data showed.

Bulk of the loans came from domestic sources at P4.431 trillion, down by P10.475 billion from the December level although 12.1% higher year-on-year. Domestic loans went down on the back as the state settled its obligations from issued debt papers.

Government securities accounted for most of the loans, while the P948-million remainder comes from a mix of direct loans availed by agencies, as well as assumed obligations.

Foreign loans accounted for roughly a third of the unsettled debts, which grew by 3.8% to reach P2.295 trillion versus December’s P2.211 trillion.

“For January, external debt escalation was principally due to peso depreciation and the impact of third currency appreciation that raised the value of the US dollar and third-currency denominated indebtedness amounting to P61.21 billion and P6.78 billion, respectively,” the Treasury said in a statement.

BSP Deputy Governor Diwa C. Guinigundo said “there is nothing to worry about” when the country’s debt goes up “by a very minimal amount.”

With the growing debt stock, the government also increased the amount of guaranteed obligations by 2.4% to P489.454 billion.

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. — Melissa Luz T. Lopez

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