Gov’t debt hits P5.38 T

MANILA, Philippines - The national government’s outstanding debt rose by P22 billion to P5.38 trillion as of November last year from P5.359 trillion a month ago due mainly to higher domestic borrowings, the Bureau of Treasury reported yesterday.

The bulk of total debt or P3.41 trillion came from domestic creditors while P1.975 trillion came from foreign entities.

Domestic debt went up by P33 billion to P3.41 trillion from the end-October level due to net issuance of government securities.

External debt, on the other hand, fell by P11 billion due to the appreciation of the local currency as well as the net depreciation of third currencies against the dollar which reduced the peso value of the national government’s debt by P14 billion and P12 billion, respectively. This was partially offset by the P15 billion net availment for the period, the BTR said.

Meanwhile, total guaranteed debt of the national government stood at P509 billion, down by P19 billion from end-October 2012 level of P528 billion. The decrease in external guaranteed obligations of P8 billion was due to local currency appreciation and third currency net depreciation against the dollar which accounted for a P2 billion and P6 billion reduction in peso value of guaranteed external obligations, respectively.

Domestic guaranteed debt likewise decreased by P11 billion due to the redemption of zero coupon bonds issued by the National Power Corp. (Napocor).

The government spent P622 million in the first 10 months of 2012 to pay down debt as part of efforts to improve its credit profile. Of the amount, P355.36 billion was used to settle principal obligations while interest payments accounted for the balance.

Finance officials said the government’s resolve to boost tax collections coupled with the regular payment of obligations allowed the country to bring down its debt to a more manageable level.

Thanks to several positive rating upgrades, the Philippines is just a notch below investment grade by major international rating agencies. This was attributed to President Aquino’s hardline efforts to contain the budget deficit and lure investors.