NG debt rises to record P12.79 trillion

The National Government’s (NG) outstanding debt rose to a record-high P12.79 trillion at the end of June, beating the previous high of P12.76 trillion in April.

Preliminary data from the Bureau of the Treasury (BTr) showed outstanding debt inched up by 2.4% from end-May’s P12.49 trillion “due to the net issuances of domestic and external loans as well as currency adjustments.”

Year on year, the debt stock jumped by 14.6% from P11.16 trillion.

The BTr said the debt pile has risen by 9.1% since the year started, after the government borrowed P1.06 trillion more.

Of the outstanding debt, the bulk or 68.5% was obtained domestically, while the rest was from foreign creditors.

As of end-June, outstanding local borrowings reached P8.77 trillion, higher than the P8.67 trillion logged in May.

The BTr attributed the increase to the P96.3 billion it borrowed through government securities, as well as the P5.36 billion impact of peso depreciation against the dollar.

The peso depreciated against the greenback from P52.412 as of end-May to P54.970 as of end-June, the BTr said.

Domestic debt was 10.4% higher than the P7.94 trillion a year earlier, and 7.3% higher than the end-December 2021 level of P8.17 trillion.

Most of the domestic debt stock still came from government securities with P8.77 trillion in June, up 18.5% year on year, and 1.2% month on month.

Meanwhile, outstanding external debt jumped by 24.7% year on year to P4.02 trillion at end-June. It inched up 5.1% month on month, and increased by 13.1% from the end-December 2021 level.

Broken down, it consisted of P1.8 trillion in foreign loans and P2.23 trillion in global bonds.

“The increment in external debt was attributed to the impact of local currency depreciation against the USD amounting to P186.94 billion and the net availment of external financing amounting to P43.18 billion; offsetting the P35.72 billion effect of net depreciation against the US dollar on third-currency denominated obligations,” the Treasury said.

Meanwhile, overall guaranteed debt rose month on month by 3.6% to P413.93 billion as of end-June, but 5.6% lower than the P438.6 billion as of June 2021.

This was attributed to P9.34 billion in net availment of domestic guarantees and the impact of local currency depreciation amounting to P10.44 billion.

“These offset the effect of third-currency fluctuations amounting to P4.60 billion and net repayments on external guarantees amounting to P0.97 billion,” the BTr said.

The government borrows from local and external sources to help fund a budget deficit capped at P1.65 trillion this year, equivalent to 7.6% of gross domestic product.

The country’s debt level reached 63.5% of gross domestic product (GDP) at the end of the first quarter, from 54.6% as of end-2020 and 39.6% as of-end 2019.

It is expected to steadily drop to 61.8% by end-2022, and to 52.5% by 2028. — Diego Gabriel C. Robles