Outstanding debt inches up in July at P7.044 trillion

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By Karl Angelo N. Vidal, Reporter

THE government’s outstanding debt inched up in July on the back of net availments on both domestic and foreign obligations, the Bureau of the Treasury said on Friday.

The total unpaid debt stood at P7.044 trillion as of end-July, P27.4 billion or 0.4% higher than the P7.016 trillion recorded as of June.

Year-on-year, debt was 10.3% higher than the P6.385 trillion as of end-July 2017.

Of the overall unpaid obligations, 34.68% or P2.443 trillion is owed to foreign creditors while 65.32% or P4.601 trillion is owed to local sources.

The external debt was 0.2% higher than the P2.437 trillion logged in the previous month due to the net availments of foreign loans totalling P20.68 billion.

However, the increase was tempered by currency fluctuations on both dollar and third-currency denominated debt amounting to P11.14 billion and P3.6 billion, respectively.

Likewise, the domestic debt was 0.5% higher compared with the P4.579 trillion the previous month.

The increase in the level of domestic debt was on the back of “net issuance of government securities amounting to P21.57 billion.” This was slightly tempered by the stronger peso, diminishing the value of onshore dollar bonds by P0.12 billion.

The local currency closed at P53.16 against the dollar on end-July, stronger than the P53.404 logged the previous month.

Guaranteed obligations amounted to P483.9 billion in July, down from the previous month’s P488.2 billion as the state settled some of its local and foreign borrowings worth P1.14 billion and P0.21 billion, respectively.

This was also due to “currency fluctuations on both dollar and third-currency denominated guarantees amounting to P1.36 billion and P1.55 billion, respectively,” the BTr added.

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.

This year, it has set a 65-35% borrowing mix in favor of domestic creditors, as it plans to borrow a total of P888.227 billion.

Looking ahead, the government will offer renminbi-denominated “panda” bonds and yen-denominated “samurai” papers in the next 12-18 months to maintain its presence at the said markets.