MANILA, Philippines — The country’s outstanding debt inched up to reach another record high of P14.15 trillion as of end-June following additional domestic borrowings to fund state financing requirements, according to the Bureau of the Treasury (BTr).
The latest debt figure went up slightly by 0.4 percent from the P14.1 trillion level the previous month. On a yearly basis, however, the debt stock picked up by 10.6 percent from P12.79 trillion in end-June 2022.
For June alone, the government added some P51.31 billion in fresh obligations primarily due to the net issuance of domestic securities.
With this, the running debt incurred by the Marcos administration stood at P1.346 trillion during its first 12 months in office.
The current debt pile is also about 96.7 percent of the expected P14.63 trillion debt by end-2023.
National treasurer Rosalia de Leon earlier said the Philippines is expected to surpass its P14.63 trillion debt assumption by end-2023.
Nonetheless, the government remains optimistic that such debt level remains manageable as the economy grows and recovers from the pandemic.
“We are not really thinking of it in terms of the nominal figure because we have repayments. And we look at debt-to-gross domestic product (GDP) and how we are using the debt to grow the economy,” De Leon said.
Finance Secretary Benjamin Diokno, for his part, also insisted that the country’s debt remains manageable, noting that even credit rating agencies such as Fitch and Moody’s are not worried about the obligation level.
“It depends on where you put it. It’s not bad to borrow money for as long as you use it properly,” Diokno said.
“We are using the money for infrastructure and the meaning of that is we are expanding the capacity of the economy,” he said.
Meanwhile, the BTr said the majority or 68.6 percent of the debt pile came from the local debt market while the remaining 31.4 percent was sourced externally.
Total domestic debt at P9.7 trillion inched up by 1.2 percent on a monthly basis, but jumped by 10.7 percent from the P8.77 trillion in June 2022.
For June alone, domestic debt grew by P114.32 billion due to the net issuance of government bonds, driven by the state’s financing requirements.
External obligations, on the other hand, decreased by 1.4 percent to P4.45 trillion month-on-month. It rose 10.4 percent from P4.02 trillion on a yearly basis.
The Treasury said the reduction in external debt was due to the impact of currency adjustments affecting both the dollar and third-currency equivalents.
This led to the decline in the peso value of the debt, amounting to P69.98 billion and P8.28 billion, respectively. These also offset the availment of foreign loans worth P15.25 billion.
Meanwhile, total debt guaranteed obligations went down by 2.6 percent to P369.73 billion due to the net repayment of both domestic and external guarantees amounting to P4.36 billion and P890 million, respectively.
This was further trimmed because of the effect of currency adjustments on both the dollar and third currency-denominated guarantees worth P2.78 billion and P1.95 billion.