Gov’t debt up 10.2% year-on-year at end of October

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BoT BTr treasury

THE national government’s outstanding debt totaled P7.17 trillion at the end of October, up 10.24% from a year earlier amid an increase in the issuance of government securities, the Bureau of the Treasury (BTr) said.

End-October debt grew by 0.10% from the previous month.

The total is equivalent to 97.82% of the projected P7.33 trillion in outstanding debt at the end of 2018.

Of the debt stock at the end of October, 64.45% or P4.62 trillion was borrowed from domestic sources, up 9.59% from a year earlier. The total was up 0.71% from the previous month.

“For the month, the registered increase in domestic debt was due to the net issuance of government securities amounting to P32.74 billion. This was slightly offset by the appreciation of the peso that decreased the value of onshore dollar bonds by P0.29 billion,” the BTr said.

The peso strengthened to P53.527 to the dollar at the end of October, from P54.102 a month earlier.

Some 35.54% or P2.55 trillion of the total outstanding debt was owed to external lenders, up 11.45% from a year earlier, and down 0.98% from September.

“The decline in external debt level was principally due to the P27.34 billion impact of the stronger peso and net repayment on foreign obligations amounting to P0.33 billion. This was tempered by the net appreciation of third-currency denominated external debt amounting to P2.52 billion,” the BTr said.

The government borrows from domestic and foreign sources to fund its budget deficit, which for this year is capped at 3% of gross domestic product (GDP).

This year, the government has raised the target share of foreign debt to 35% from 20% in 2017 to take advantage of favorable interest rates.

The government expects the debt as a share of the economy to decline to 38.6% by 2022 after coming in at 42.6% in the first quarter. — Elijah Joseph C. Tubayan