Philippines debt swells to over P12 trillion

MANILA, Philippines — The country’s debt ballooned to a new record high, breaching the P12-trillion mark as of end-January due to the government’s continued borrowing efforts to fund  its pandemic response.

Based on a report from the Bureau of the Treasury (BTr), the country’s debt stock rose by 16.5 percent to P12.03 trillion as of end- January from P10.33 trillion in the same period last year.

Month-on-month, the total outstanding debt expanded by 2.6 percent from the P11.73 trillion debt recorded in December last year.

Domestic debt, which accounted for 70 percent of the total, grew by over 14 percent to P8.37 trillion as of end-January from P7.33 trillion a year ago.   Foreign debt, on the other hand,  rose by 22 percent to P3.66 trillion from P3 trillion.

Government securities accounted for the bulk of the domestic debt at P8.07 trillion, while loans made up the remainder at P300.16 billion. Debt papers issued abroad comprised more than 54 percent of the external debt at P1.99 trillion as loans acquired from lenders took the remaining 46 percent at P1.67 trillion.

In January, the government recorded a net availment of P197.04 billion due to the P300 billion in provisional advances taken from the BSP.

Finance Secretary Carlos Dominguez   has  said the government plans to pay all of its debts owed to the BSP by June as part of efforts to consolidate the country’s fiscal position.

The Treasury also said the acquisition of new loans totaling P94.88 billion and the weakening of peso against the   dollar worth P11.23 billion pushed the country’s external debt higher, and was only offset by valuation adjustments in other currencies amounting to P2.37 billion.

Guaranteed debt   declined by   seven percent to P422.52 billion as of end-January from P456.39 billion a year earlier. On a monthly comparison, guaranteed debt dipped by P1.4 billion due to net payment for domestic and foreign guarantees.

The national debt, when measured against  gross domestic product,  ballooned to a 16-year high of 60.5 percent in  2021.

The highest since 2005’s 65.7 percent, the 2021 debt-to-GDP ratio topped both the government program of 59.1 percent and the European standard of 60 percent, raising concerns about the government’s capacity to settle its debts.