Philippines debt pile hits record high P11.9 trillion

MANILA, Philippines — The country’s debt pile surged to a record high of P11.92 trillion as of end-September, surpassing the government’s target of P11.73 trillion with three months left in the year, the Bureau of the Treasury (BTr) said yesterday.

The latest  debt stock was  27 percent  higher  than the P9.37 trillion a year ago as the government exhausts all possible means to raise more funds for pandemic response.

Broken down, the government’s  debt  from domestic sources swelled by 30 percent to P8.39 trillion as of end-September from P6.44 trillion a year ago, while external obligations spiked by a fifth to P3.53 trillion from P2.93 trillion.

Bonds issued by the government to investors accounted for roughly 94 percent of the domestic debt at P7.85 trillion. On the other hand, loans obtained by state agencies made up the remaining six percent at P540 billion.

Similarly, bonds in local and foreign denominations sold overseas accounted for the bulk of total foreign debt at P1.99 trillion. Dollar-denominated bonds took up around 78 percent of the offshore bonds at P1.55 trillion, followed by   euro bonds (P238.7 billion), samurai bonds (P88.68 billion), peso bonds (P85.57 billion) and panda bonds (P19.66 billion).

Loans acquired from bilateral and multilateral partners accounted for the other 44 percent of foreign borrowings at P1.54 trillion.

In September, the government added P274.53 billion to the debt pile due to the issuance of debt papers and acquisition of foreign loans, according to the Treasury.

For September alone, the government amassed P167.45 billion in domestic debt due to the net sale of securities and P107.08 billion in foreign obligations on the take up of new financing.

The country’s guaranteed debt, on the other hand, slid by about three percent to P432.86 billion as of end-September  from P445.4 billion a year ago. However, the amount went up by less than one percent from P432.22 billion in end-August.

In turn, the government has breached by nearly P190 billion its target of ending the year with a debt stock of P11.73 trillion. At that rate, the outstanding debt should account for 59 percent of   gross domestic product (GDP), below the 60 percent threshold observed by the international community.

The government plans to borrow P3.07 trillion this year, 81 percent of which will be sourced from local lenders, to cover for a budget deficit which is expected to expand   to 9.3 percent of GDP at P1.85 trillion.