OF THE NATIONAL GOVERNMENT (NG) the remaining debt is imported reached P16.02 trillion as of the end of October amid the depreciation of the peso against the US dollar, The Bureau of the Treasury (BTr) said.
Data from BTr on Tuesday showed that outstanding debt increased by 0.8% or P126.95 billion to P16.02 trillion in late October from P15.89 trillion in late September.
“The increase was mainly due to the impact of the depreciation of the peso against the US dollar from P56.017 at the end of September 2024 to P58.198 at the end of October 2024,” BTr said in a statement.
Year-on-year, the debt increased by 10.6% from P14.48 trillion.
Of all loans, 67.98% come from domestic sources.
As of the end of October, the outstanding domestic debt decreased by 0.4% to P10.89 trillion from P10.94 trillion at the end of September.
Government securities accounted almost all household debts.
Year-on-year, domestic debt increased by 10% from P9.9 trillion.
“The decrease was due to the redemption of P52.65 billion of government funds, half of the money.fset by the P6.23 billion increase in peso conversion of US dollar domestic debt brought about by the weaker peso,” said BTr.
Meanwhile, external debt rose 3.5% to P5.13 trillion at the end of October from P4.96 trillion at the end of September, BTr said.
Year-on-year, external debt increased by 12.05% from P4.58 trillion in the same period last year.
“The increase was due to the availability of foreign loans amounting to P20.47 billion, and foreign exchange, which added R152.9 billion to the foreign debt,” said BTr.
The Treasury said the depreciation of the peso against the US dollar increased the foreign debt by P193 billion.
“However, this was offset by the P40.1-billion positive effect of the third currency’s positive movement against the US dollar,” it said.
External debt includes P2.42 trillion in loans and P2.71 trillion in international bonds as of the end of October.
When discounted, government securities included P2.32 trillion in US dollar bonds, P218.49 billion in euro bonds, P58.2 billion in Islamic certificates, P57.93 billion in Japanese yen bonds, and -P54.77 billion in international peso bonds.
Meanwhile, guaranteed NG obligations at the end of October increased by 10.4% to P411.76 billion from P372.86 billion as of the end of September.
“This resulted in R35.85 billion in domestic guarantees and a P6.15 billion result the depreciation of the peso against the US dollar, although slightly offset by the P3.1 billion decrease in foreign guarantees linked to the movement of the third currency,” said BTr.
Year-on-year, NG guaranteed liabilities increased by 14.1% from P361 billion.
“I can only conclude that the increasing deficit due to limited tax revenue will eventually lead to higher NG debt from the end of September. The level of P15.9 trillion to more than P16 trillion in October,” said GlobalSource country analyst Diwa C. Guinigundo.
The Development Budget Coordinating Committee on Monday increased the fiscal deficit in 2024 to P1.52 trillion, representing 5.7% of the gross domestic product (GDP) from P1.48 trillion or -5.6% of GDP previously.
“In peso terms, dollar obligations will be higher including corresponding debt repayments. If the dollar continues to strengthen relative to the peso and other currencies and NG’s income remains limited, the outlook is not exactly encouraging,” said Mr. Guinigundo.
Chief Economist Rizal Commercial Banking Corp. Michael L. Ricafort said the debt remains high as the government borrowed heavily to finance the budget deficit.
“The peso’s weak exchange rate against the US dollar by about 15% from 2022 has also effectively increased the peso’s equivalent to the US dollar and other foreign currency liabilities of the National Government,” he added.
Mr. Ricafort said the rate cuts by the US Fed and the Bangko Sentral ng Pilipinas will help reduce debt servicing costs.
At the end of September, NG debt as a share of GDP stood at 61.3%, higher than 60.2% last year and 60.1% at the end of 2023.
This was still above the 60% limit that international lenders consider manageable for developing economies.
Government aims to reduce debt-average GDP reached 60.6% by the end of 2024.
NG debt is expected to reach P16.06 trillion by the end of 2024. Aubrey Rose A. Inosante
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