NATIONAL GOVERNMENT (NG) debt rose by 1.2% to P9.16 trillion as of end-July, as it borrowed more to finance its coronavirus disease 2019 (COVID-19) response and offset weak revenues amid the economic slowdown.

Data from the Bureau of the Treasury (BTr) on Wednesday showed the debt portfolio was 18.5% higher than its end-December 2019 level of P7.73 trillion.

About two-thirds of the debt was sourced domestically, while 32% came from external sources.

Outstanding domestic debt edged up 1.1% to P6.25 trillion from the end-June level of P6.19 trillion, as the government availed itself of more loans and issued more local government securities.

To date, domestic debt has risen by 22% or P1.1 trillion higher since the start of 2020.

Outstanding government securities issued inched up 1.1% to P5.955 trillion from July and 13.4% up year on year.

The external debt stock hit P2.908 trillion as of end-July, up 1.5% from P2.864 trillion in June and higher by 14% from a year ago.

The increase was largely due to more loans that month worth P64 billion, pushing the outstanding foreign loans by 4.9% to P1.226 trillion. The total was 26% higher year on year.

The BTr said the debt stock rose by P18.75 billion due to the appreciation of third-currency denominated external loans, which more than offset the P38.88 billion net effect of a stronger local currency.

The Treasury said the peso appreciated to P49.114 against the greenback at the end July from P49.79 a dollar in end June.

Between January and July, the government got P280 billion ($5.7 billion) in program loans from foreign lenders and P15.05 billion ($310 million) in project loans. Proceeds from these loans will be used for the government’s pandemic response and infrastructure program.

Offshore bond issuances have reached P1.682 trillion so far, down 0.8% from a month ago but still 6.3% higher year on year.

“The total NG guaranteed obligations decreased by P1.18 billion or 0.3% month-on-month to P458.83 billion in July.,” BTr said.

The lower level of guarantees was due to the net redemption of both local and external guarantees amounting to P0.33 billion and P0.42 billion, respectively,” it added.

The government plans to borrow P3 trillion this year to plug its budget deficit, seen to hit 9.6% of gross domestic product.

It plans to maintain a 74:26 borrowing mix in favor of domestic sources to mitigate external volatilities and shocks. — B.M.Laforga