Philippines outstanding debt breaches P14 trillion

MANILA, Philippines — The country’s outstanding debt has hit another record high, breaching the P14-trillion mark as of end-May.

Latest data from the Bureau of the Treasury showed that the national debt reached another record-high of P14.1 trillion by end-May, inching up by 1.33 percent from the P13.91 trillion level the previous month.

On a yearly basis, the debt stock picked up by 13 percent from P12.5 trillion.

For May alone, the government added some P185.4 billion in fresh obligations due to the issuance of both domestic and external debt.

With this, the running debt incurred by the Marcos administration stood at P1.295 trillion in 11 months. The current debt pile is now about 96.35 percent of the expected P14.63 trillion debt by end-2023.

Finance chief Benjamin Diokno earlier defended the current debt level of the Philippines.

“Borrowing money is not bad but it’s where you put it that matters,” Diokno said.

The debt pile is expected to maintain its upward momentum as the government is poised to increase its borrowing to P2.46 trillion next year, largely from domestic creditors.

The mix would be an 80:20 domestic-external funding split.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said it is good timing for the government to borrow more next year.

“This is amid the easing trend in inflation and eventually interest rates and borrowing costs especially if the Fed starts cutting rates in 2024,” Ricafort said.

Meanwhile, Treasury data showed that 70 percent of the debt pile represented domestic borrowings and the remaining 30 percent sourced externally.

Total domestic debt at P9.59 trillion went up 1.38 percent on a monthly basis but jumped 10 percent from the P8.67 trillion in May 2022.

External obligations, on the other hand, increased by 1.22 percent to P4.51 trillion month-on-month.

Meanwhile, total debt guaranteed obligations inched up by a percentage to P384.52 billion.