THE national government’s outstanding debt as of end-August swelled to P9.6 trillion as it secures more borrowings to finance its spending needs amid the Covid-19 pandemic.
Latest data from the Bureau of the Treasury showed the country’s debt stock surged by 21.1 percent from P7.94 trillion in end-August last year.
Compared to end-2019 level of P7.731 trillion, the government’s debt portfolio as of end-August jumped by 24.4 percent. Month-on-month, the country’s debt stock is up by 4.92 percent from P9.16 trillion as of end-July.
Of the total outstanding debt, 69.8 percent was sourced domestically, while 30.2 percent came from foreign lenders.
Domestic debt as of end-August also rose by 27.3 percent year-on-year to P6.7 trillion from P5.27 trillion a year ago.
To date, domestic debt has increased by 30.92 percent from P5.13 trillion as of end-2019. The end-August domestic debt stock also increased by 7.3 percent from P6.26 trillion as of end-July.
According to the Treasury, domestic borrowings for the year as of end-August amounted to P2.5 trillion. Of the total new issuances, P925.38 billion was in Treasury bills (T-bills), P447.86 billion was in Treasury bonds (T-bonds) and P827.11 billion in Retail Treasury Bonds. This also includes the P300-billion short-term borrowing from the Bangko Sentral ng Pilipinas through a repurchase agreement.
Gross maturities also reached P914.08 billion. Of this, P540.08 billion was for T-bills and P374 billion was for T-bonds.
On the other hand, external debt as of end-August has reached P2.902 trillion, inching up by 8.8 percent year-on-year from P2.67 trillion in the same period in 2019.
It also went up by 11.5 percent from P2.604 trillion as of end of last year.
However, this is 0.2 percent lower from P2.908 trillion as of end-July.
The Treasury said the month-on-month decline in external debt was due to the P37.36-billion net effect of local currency appreciation.
For the period, project loan availment reached P17.09 billion, while program loans amounted to P306.54 billion. Meanwhile, offshore bond issuances amounted to P186.06 billion.
Total guaranteed obligations of the national government as of end-August dropped by 8.8 percent to P446.997 billion from P490.278 billion a year ago.
The lower level of guarantees was due to the net redemption of both local and external guarantees amounting to P8.59 billion and P0.42 billion, respectively. Local currency appreciation further reduced the value of external guarantees by P2.85 billion, offsetting the effect of third-currency appreciation amounting to P0.03 billion.
Since the start of the year, guarantees as of end-August this year slid by 8.5 percent from P488.746 billion as of end-December last year.
The government borrows to finance its spending requirements as well as to cover its budget deficit.
The Development Budget Coordination Committee (DBCC) also expects the country’s debt-to-GDP ratio this year to increase to 53.91 percent of GDP—a level it has not seen in over a decade—from a record low of 39.6 percent of GDP last year.
By the end of this year, the national government expects its outstanding debt to reach P10.16 trillion, up by 31.42 percent from last year’s amount.
As tax collections are down amid the pandemic, the Development Budget Coordination Committee projects the country’s budget deficit to more than double to 9.6 percent of GDP or P1.815 trillion from only 3.4 percent of GDP or P660.2 billion last year.
Image credits: Roy Domingo