THE National Government’s outstanding debt reached P10.774 trillion as of end-March, after the sale of retail Treasury bonds (RTB), the Bureau of the Treasury (BTr) reported on Monday.

The BTr said the country’s debt stock went up 3.5% from the P10.405-trillion level recorded in February, and rose 27% from P8.477 trillion seen in the period ending March 2020. Since the year started, the debt pile grew by 10% from P9.795 trillion.

The total comprised 72% of local debt and 28% in foreign borrowings.

The increase in outstanding debt was attributed to the 5.2% month-on-month growth in domestic debt to P7.745 trillion, after the BTr raised P411.8 billion in fresh funds from the sale of three-year RTBs on March 4.

Year on year, local debt stock rose 33% from P5.813 trillion as of March 2020. The total debt grew by 16% year to date.

This included P7.204 trillion in government securities and P541 billion in outstanding loans from the central bank.

Meanwhile, the country’s foreign debt stock dipped by 0.45% month on month to P3.03 trillion as of end-March due to the net impact of local- and third-currency fluctuations against the greenback.

“These were more than enough to offset the net availment of foreign loans amounting to P15.15 billion,” the Treasury said.

Outstanding external debt was still 13.7% higher than the P2.665 trillion recorded a year ago, but 2.3% lower since the start of 2020.

The P3.03 trillion foreign debt pile includes P1.368 trillion in loans from external lenders, and P1.66 trillion in global bonds issued so far.

Meanwhile, the total guaranteed obligations of the government went down by 2.4% to P435.8 billion as of March from P446.7 billion as of end-February.  This was also 9.5% lower than the P481.8 billion in March 2020.

“The lower level of guaranteed debt was due to the net redemption of both local and foreign guaranteed obligations amounting to P4.84 billion and P1.69 billion, respectively,” the Treasury said.

Domestic guaranteed debt slipped 2% month on month to P239.3 billion, which was also 6% lower from the previous year.

Foreign guaranteed obligations also declined by 3% to P196.5 billion as of end-March from P202.6 billion the month before.

Local- and third-currency exchange rate fluctuations also trimmed the peso value of the external guaranteed debt by P450 million and P3.93 billion, respectively.

The sustained rise in overall debt stock was due to the widening budget deficit as the government has to hike borrowings to make up for low revenues and to ramp up spending, said Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort.

The country’s fiscal gap almost tripled year on year to P191.4 billion in March, based on separate data from the BTr. Month on month, this was 65% higher than the P115.97-billion deficit in February.

The higher deficit was due to the 22% increase in total spending and a 17% drop in revenues.

“Tighter quarantine standards recently [in Metro Manila and nearby provinces] could further slow down economic and business activities, reduce the government’s tax collections that could result in wider budget deficits, more government borrowings that lead to higher outstanding debt,’” Mr. Ricafort added.

The government is planning to raise P3 trillion this year from domestic and external lenders to help fund its budget deficit seen to hit 8.9% of gross domestic product.

Official estimates showed the government’s debt stock could rise to P11.98 trillion by end-2021. — Beatrice M. Laforga