National Government (NG) debt rose to hit a new high of P15.89 trillion at the end of September, but the Bureau of the Treasury (BTr) said the level is still “manageable.”
Data from BTr on Wednesday showed that outstanding loans rose 2.2% to P15.89 trillion at the end of September from P15.55 trillion at the end of August.
“Outstanding debt increased slightly by 2.2% compared to the level at the end of August 2024 due to the availability of new foreign and domestic debt,” BTr said in a statement.
Year-on-year, loans increased by 11.4% from P14.27 trillion last year.
“Nevertheless, NG’s focus on local capital raising allows the government to reduce its exposure to external risks to only 31.19% of its debt portfolio, while allowing for the development of the local bond market and providing Filipinos with quality investment vehicles to grow their savings,” said the Treasury.
The majority, or 68.81% of the total debt, comes from domestic sources.
As of the end of September, outstanding domestic debt grew by 1.3% to P10.94 trillion from P10.79 trillion last month. Government securities are included in almost all household loans.
Year-on-year domestic debt increased by 12.3% from P9.73 trillion.
“This (increase) was mainly driven by the release of R145.11-billion government funds, which is a partial creation.fis set for a P460-million decrease in the value of US dollar securities due to the appreciation of the Philippine peso,” said BTr.
Meanwhile, external debt increased by 4.2% to P4.96 trillion at the end of September from P4.76 trillion at the end of August, BTr said. It also jumped 9.3% from P4.53 trillion in the same period last year.
The increase in external debt was caused by a total of P200.89 billion in foreign loans, including P140.99 billion or the issuance of $2.5 billion of international bonds denominated in US dollars, said BTr. The transaction was freleased in September.
“Nevertheless, the favorable adjustment in foreign trade contributed to a significant decrease of P2.43 billion in the external debt.”
The peso closed at P56.017 against the US dollar at the end of September, up 16.2 cents from its P56.179. fat the end of August.
External debt includes P2.32 trillion in loans and P2.64 trillion in international bonds.
When discounted, government securities included P2.25 trillion in US dollar bonds, P215.23 billion in Euro bonds, P59.11 billion in Japanese yen bonds, P56.02 billion in Islamic certificates and P54.77 billion in international peso bonds.
Meanwhile, guaranteed NG obligations at the end of September increased by 2.4% to P372.86 billion from P364.03 billion as of the end of August. It also gained 2.9% to P362.22 billion at the same time in 2023.
“This was largely motivated by the P12.3 billion in new guarantees of the Power Sector Assets and Liabilities Management Corp. (PSALM) and the National Food Authority (NFA), and P940 million in the revision of the third currency guarantee. ,” said the Treasurer.
“A total of P3.95 billion in payments and a P460 million decline in US dollar guarantees offset the increase,” it added.
Chief Economist of Rizal Commercial Banking Corp. Michael L. Ricafort said in a message from Viber that the increase in debt was caused by the increase in debt to connect the budget.fsnow.
In the first nine months of 2024, the budget defthe economy shrank by 1.35% to P970.2 billion from P983.5 billion last year.
“Some government bond maturities in October 2024 and NG’s seasonally reduced borrowing towards the end of the year due to the Christmas holiday season may reduce the increase in NG’s additional debt,” said Mr. Ricafort.
At the end of June, NG debt as a share of gross domestic product (GDP) stood at 60.9%, still above the 60% threshold considered by international lenders as manageable for developing economies. It aims to reduce the debt-to-GDP ratio to 60.6% by the end of 2024.
NG debt is expected to reach P16.06 trillion by the end of 2024, of which P10.92 trillion will come from domestic sources and P5.13 trillion from foreign sources. – Beatriz Marie D. Cruz
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