Gov’t debt swells 9% to P5.64 T in August

MANILA, Philippines - The government’s outstanding debt stood at P5.64 trillion as of end-August, nine percent higher than in the same period last year due to higher borrowings from the domestic market.

Data from the Bureau of Treasury showed that bulk of debt (P3.65 billion) was secured from local lenders while the balance (P1.995 billion) came from foreign creditors.

Domestic debt went up 16.3 percent due to a net issuance of P147 billion worth of retail Treasury bonds as the government continued to take advantage of the domestic market’s strong liquidity.

Foreign debt, on the other hand, fell 2.5 percent as the Aquino administration continued to prop up domestic borrowings to siphon off excess liquidity in the system.

This is in line with government’s bias towards domestic financing to lessen its exposure to foreign exchange risks.

Debt guaranteed by the National Government, meanwhile, amounted to P500 billion as of August, an increase of P8 billion month-on-month. Of the total, 28.7 percent (P144 billion) are domestic guaranteed debts while 71.3 percent P356 billion are external guaranteed obligations.

Similar to external debt, NG guaranteed obligations increased as a function of currency adjustments.

National Treasurer Rosalia De Leon said the manageability of the Philippine government’s debt has earned the country an investment grade status from the three major internal credit rating agencies, making it less susceptible to external shocks.