New borrowings push debt to record P15.9 trillion

MANILA, Philippines —   The country’s outstanding debt hit a fresh high of P15.89 trillion as of end-September following the net availment of new external and domestic obligations, according to the Bureau of the Treasury.

The latest figure is also 11.4 percent higher than the P14.27-trillion debt in the same month last year.

For September alone, the government added P343.11 billion in new debts – both from external and domestic obligations.

Despite hitting another record high, the Treasury said the debt remains at a manageable level, with the majority still sourced domestically.

“The government’s strategic focus on local fundraising allows it to limit external risk exposure while enabling the development of the local bond market and providing Filipinos with quality investment vehicles to grow their savings,” the Treasury said.

“The government’s prudent debt management, supported by heavy bias on local funding, contributes to the country’s strong fiscal position and continued resilience amid global uncertainties,” it said.

As of end-September, the outstanding debt is at 98.9 percent of the 2024 debt expectation of a record-high P16.06 trillion.

The Treasury said domestic borrowings accounted for the majority or 68.81 percent of the debt pile while the remaining 31.19 percent came from external sources.

Total domestic debt at P10.94 trillion rose by 1.3 percent on a monthly basis due to the net issuance of government securities worth P145.11 billion.

This was partially offset by the P460 million downward revaluation effect of peso appreciation on dollar-denominated domestic securities.

Domestic debt, however, jumped  by 12.3 percent from  P9.73 trillion in September 2023.

External obligations, on the other hand, grew by 4.2 percent to P4.96 trillion month-on-month and a higher 9.3 percent from P4.53 trillion on a yearly basis.

The Treasury said the increase was brought about by the P200.89 billion in net foreign borrowings.

This includes the $2.5 billion (P140.99 billion) from a triple-tranche global bond issuance to support general budgetary requirements.

The country secured $500 million for its 5.5-year tranche with a 4.375 percent yield while it borrowed $1.1 billion for its 10.5-year tenor with a coupon of 4.75 percent.

Its 25-year sustainability bond, on the other hand, fetched an average rate of 5.175 percent and raised another $900 million.

Favorable foreign exchange adjustments contributed a substantial decrease of P2.43 billion in the overall external debt.

Further, the government’s guaranteed obligations increased by 2.4 percent to P372.86 billion, reflecting the P12.3 billion in new guarantees of the Power Sector Assets and Liabilities Management Corp. and the National Food Authority.

There was also a P940-million upward revaluation of third currency-denominated guarantees, while net repayments of P3.95 billion and P460 million downward revaluation of  dollar-denominated guarantees tempered the increase.