Philippines debt piles up to P15.02 trillion in April

MANILA, Philippines — The country’s outstanding debt crossed the P15-trillion level anew in April mainly due to higher borrowings and the depreciation of the peso against the dollar.

Latest data from the Bureau of the Treasury showed the national debt stood at P15.02 trillion in end-April, inching up by 0.6 percent from P14.93 trillion the previous month.

On a yearly basis, however, the debt stock picked up by 7.9 percent from P13.91 trillion.

For April alone, the government added P91.5 billion in fresh obligations due to the net issuance of government securities and the local currency depreciation versus the dollar.

Security Bank chief economist Robert Dan Roces also attributed the increase in outstanding debt to the depreciation of the peso, which inflates the value of dollar-denominated debt.

The peso breached the 57 to $1 level on April 16, the first time in nearly two years. It continued to weaken against the greenback, piercing the 58 to $1 level this May.

Treasury data also showed the peso depreciated against the dollar from 56.260 as of end-March to 57.583 as of end-April.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the increase in debt, despite the budget surplus for the month, may also have to do with the lower debt maturities in April compared to the large retail Treasury bond maturity of about P700 billion in early March.

“Geopolitical risks in April due to the Israel-Iran conflict could have led to some hedging of government borrowings as a matter of prudence,” he said.

Meanwhile, the Treasury said the majority or 68.64 percent of the debt pile were domestic borrowings and the remaining 31.36 percent were sourced externally.

Total domestic debt stood at P10.31 trillion, 0.3 percent higher on a monthly basis and nine percent more than the P9.46 trillion in April 2023.

This is due to the net issuance of domestic securities worth P27.23 billion and the P3.78-billion effect of peso depreciation on foreign-currency-denominated domestic debt.

On the other hand, external obligations increased by 1.3 percent to P4.71 trillion month-on-month and by 5.74 percent from P4.45 trillion on a yearly basis.

The Treasury said despite the P32.91 billion net repayment in foreign loans within the month, the “considerable” depreciation of the peso against the greenback caused a P109.31-billion upward adjustment in the valuation of dollar-denominated debt.

This was partly offset by the third-currency adjustments versus the US dollar, which trimmed P15.9 billion from the peso value of foreign currency debt.

Meanwhile, total debt guaranteed obligations went up by 2.9 percent to P356.06 billion due to the net availment of domestic guarantees amounting to P7.54 billion and the impact of peso depreciation on foreign-currency-denominated guarantees amounting to P3.80 billion.