NG debt down slightly in Nov

MANILA, Philippines – The outstanding debt of the national government (NG) slightly fell to P5.953  trillion as of the end of November last year as both foreign and local obligations declined.

The amount was 0.09 percent lower than the P5.958 trillion debt recorded as of end-October 2015.

Of the total, P3.9 trillion comprised domestic debt while P2.06 billion was denominated in foreign currency.

Domestic debt represented a 0.06 percent drop while foreign obligations decreased 0.13 percent.

The bulk of local debt was in the form of government securities (P3.895 trillion). Direct and assumed loans, meanwhile were steady at P598 million.

The NG sells Treasury bonds and bills to investors every two weeks. T-bonds and T-bills are instruments used to borrow money from local investors, who in turn, benefit from the interest charged on the papers.

Foreign debt declined due to lower loans to agencies. Direct loans dipped 0.83 percent to P757.08 billion, offsetting a 0.28-percent increase in the value of foreign government bonds to P1.3 trillion. The increase was partly due to the lower value of the peso against the dollar during the period.

Last November, the peso was pegged at a weaker P47.10 as against the dollar.  This was lower than  the P46.90 recorded in October.

Debtors shell out more pesos to settle their foreign obligations when the local currency is weak.

The peso’s 5.23-percent decline against the greenback last year was tamer than other Asian currencies such as the Malaysian ringgit’s 19 percent and Indonesian rupiah’s 9.9 percent. 

 The NG borrows from the domestic and foreign markets to bridge its budget deficit or settle existing debts.

“The external debt portfolio still went down due to the combined effect of net repayments and the depreciation of third-currencies against the US dollar,” the BTR said.