Government debt falls month-on-month in April amid stronger peso

OUTSTANDING government debt declined month-on-month in April due to a stronger peso, the Bureau of the Treasury (BTr) reported.

National government debt stood was P7.787 trillion at the end of April, down 0.19% from the end of March but up 13.27% year-on-year.

In the four months to April, overall government debt rose 6.77% from the end of 2018.

At the end of April, the peso strengthened to P52.098 against the dollar from P52.629 at the end of the previous month.

Two-thirds of the debt stock at the end of April was held by domestic creditors at P5.205 trillion. This was up 0.15% from the previous month.

The BTr said the Philippines was a net issuer of government securities in April worth P8.82 billion. On the other hand, the total debt was reduced by about P0.27 billion due to the revaluation of onshore dollar bonds brought by the strengthening of the peso.

In the four months to April, domestically-sourced debt rose by 9% from P4.777 trillion at the end of 2018.

On the other hand, external debt was P2.581 trillion, down 0.92% from a month earlier.

The rise in overseas debt was mainly due to the downward adjustments in both the dollar and third-currency denominated debt worth P26.29 billion and P0.28 billion, respectively.

These offset net availments of foreign loans worth P2.57 billion.

Meanwhile, guaranteed obligations totaled P482.98 billion in April, up 0.7% month-on-month.

“This was due to the net issuance of both domestic and external guarantees amounting to P6.44 billion and P0.24 billion, respectively,” the BTr said.

It said this was tempered by the downward adjustments in both peso and third-currency denominated guarantees, which fell P2.91 billion and P0.45 billion, respectively.

Total state guaranteed debt fell 0.9% from the end of 2018.

The government plans to borrow up to P1.189 trillion in 2019 to help finance its spending. Of this year’s total, P891.7 billion will be sourced domestically and P297.2 billion from overseas.

The Development Budget Coordination Committee adjusted the borrowing ratio in favor of domestic sources to 75-25 for 2019, from the previous year’s 65-35 ratio.

The government borrows from domestic and foreign sources to fund its budget deficit, which for this year is projected at 3.2% of gross domestic product. — Karl Angelo N. Vidal