THE National Government’s (NG) outstanding debt rose to P10.327 trillion as of end-January after it borrowed another P540 billion from the central bank to boost its pandemic response, the Bureau of the Treasury (BTr) reported.

Latest BTr data showed the debt stock increased by 5.4% from P9.795 trillion as of end-December and by 33% from the P7.763 trillion logged in January 2020.

“The level of NG debt reflects a P532.46-billion increment from the end-December 2020 level predominantly due to the reavailment of the P540-billion short-term loan facility from the BSP (Bangko Sentral ng Pilipinas),” the Treasury said in a statement.

In December, the government repaid the P540-billion provisional advances from the BSP, only to borrow the same amount again the following month.

Domestic borrowings made up 71% of the P10-trillion debt stock, while the rest was sourced offshore.

The outstanding local debt went up by 9.4% from end-December to P7.326 trillion in January driven by the borrowings from the central bank. Year on year, the domestic debt stock jumped by 43% from P5.124 trillion.

Local government securities issued so far reached P6.785 trillion, up 1.4% month on month and 32.4% higher from its year-ago level of P5.13 trillion.

Meanwhile, NG total foreign debt went down by 3.2% to P3 trillion as of end-January from P3.1 trillion in December after the government repaid some P93.49 billion of foreign loans.

The BTr said the debt pile was also reduced due to the P8.47 billion effect of third currency depreciation against the dollar.

Despite the decrease, the external debt stock was still 13.7% bigger when compared with P2.64 trillion recorded in January 2020.

This included P1.335 trillion in foreign loans and P1.667 trillion in global bonds sold.

The BTr said despite the rising debt stock, the government’s borrowing costs remained low as shown in its weighted average interest rate (WAIR) which went down to 4.13% in January from 4.17% in December and 4.95% a year ago.

“A lower WAIR means that our interest bill (interest payments or IP) will be lower as new debt is contracted at lower rates. This helps our fiscal managers as IP will take up less of the budget, freeing more space for productive spending,” the BTr said.

Only 9.56% of the debt stock is exposed to interest rate volatility, it added.

The NG’s debt portfolio also has an average residual maturity of 7.55 years, or within the 7-10 target as the state prefers loans with shorter maturity since these are generally cheaper than those with longer tenors.

The average residual maturity for domestic debt eased to 5.37 years from 5.45 years last year, while that of the external debt went up to 12.49 years from 12.14 years.

“As markets moved towards these tenors, we are still maintaining average maturity so that we manage refinancing risks, or the risk that we face when we refinance our maturing obligations. Generally, this means that we are managing our near-term debt,” the BTr said.

Meanwhile, the total NG guaranteed debt eased by 0.4% from a month ago to P456.39 billion in January due to the net redemption of local and foreign guarantees worth P320 million and P180 million, respectively. The total guaranteed debt fell by 6.5% from P488.3 billion a year ago.

The total was further brought down by the lower value of external guarantees in peso terms, according to the Treasury.

Government estimates showed that the NG debt stock will rise to P11.98 trillion by end-2021.

Last year, the NG debt stock as a percentage of gross domestic product (GDP) spiked to a 14-year high at 54.5% from the record low of 39.6% in 2019. — Beatrice M. Laforga

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