By Jenina P. Ibañez, Reporter  

The national government’s outstanding debt rose to P11.9 trillion as of the end of September as the peso depreciated against the US dollar, preliminary data from the Bureau of the Treasury (BTr) showed. 

The end-September debt level was 27.2% higher than last year’s figure, and was 2.41% higher than a month earlier. 

This was “due to net issuance of both domestic and external debt and peso depreciation against the US Dollar,” BTr said in its report on Friday. 

Government debt rose by 21.7% since the start of the year, or P2.12 trillion over nine months. 

Broken down, 70.4% of the debt came from domestic borrowing, while the rest were sourced overseas. 

Domestic debt at the end of September increased by 2% to P8.39 trillion from August. Domestic debt stock grew 30.3% year on year. 

Outstanding government securities was up 2.2% to P7.85 trillion. The government also has P540 billion from the Bangko Sentral ng Pilipinas (BSP) borrowed last year to continue funding the country’s pandemic response. 

External debt rose 3.10% to P3.529 trillion at the end of September from the end of August. 

“For September, the increment in external debt was due to the net availment of foreign loans amounting to P43.99 billion and the effect of local currency depreciation against the US Dollar amounting to P76.82 billion,” BTr said. 

“This more than offset the impact of third-currency fluctuations against the US Dollar amounting to P13.73 billion.” 

Foreign debt at the end of September went up 20.4% from a year earlier, and increased 13.8% since the start of the year. 

Foreign debt consisted of P1.54 trillion in loans and P2.0 trillion in government securities. 

Government securities included P1.6 trillion in dollar notes, P239 billion in euro bonds, P89 billion in yen paper, P20 billion in yuan notes and P86 billion in peso global bonds. 

The government’s total guaranteed debt went up 0.10% to P432.9 billion in September from a month earlier. 

“Net repayments on both domestic and external guarantees amounted to P2.56 billion for the month,” BTr said. 

“However, local-currency depreciation against the US dollar increased the value of external guarantees by P4.47 billion, offsetting repayments and third-currency depreciation which trimmed P1.27 billion.” 

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort in an email said increased government spending, especially on infrastructure, also led to wider budget deficits and some corresponding pick up in outstanding government debt. 

Increased government spending on infrastructure and in preparation for the elections could help stimulate the economy and “would lead to wider budget deficits and, in turn, would require more government borrowings/debt to finance the said budget deficits,” he said.