Pandemic costs push up government debt beyond P11 trillion in May
MANILA, Philippines — The government’s outstanding debt sustained an uptrend in May to breach the P11-trillion mark amid the Duterte administration’s continued borrowing binge to fund ballooning pandemic expenses.
The state’s debt burden stood at P11.07 trillion as of May, up 0.73% month-on-month, the Bureau of the Treasury reported Monday. Since the beginning of the year, obligations have accumulated by 13%.
Data showed the heavier debt load was due to increased borrowing onshore. But this was offset by a strong peso that brought down the value of foreign liabilities.
Broken down, local debts, which accounted for 71.5% of the entire debt pile, inched up 1.3% month-on-month to P7.92 trillion in May “as a result of the net issuance of government securities” like Treasury bonds and bills.
On the other hand, external debts in May inched down 0.74% from the preceding month to P3.16 trillion due to “P28.58 billion impact of local-currency appreciation against the US dollar”. The government also paid foreign loans that fell due during the month.
The continued ascent of debts was expected. This year, economic managers are open to adding P170 billion on existing spending to finance a much-needed relief package, all while prolonged lockdowns continue to sap state revenues. The additional expenditures, in turn, would bloat the state’s budget deficit, as a share of the economy, to a record 9.4% this year.
To bridge the massive fiscal gap, the government wants to borrow P3.02 trillion from local and foreign sources this year.
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