End-September PHL debt hits record-high ₧13.52 trillion

Photo shows the facade of the Bureau of the Treasury building.

THE Philippines’s outstanding debt as of end-September zoomed to a fresh record high of P13.52 trillion, overshooting the national government’s projected debt stock this year amid the continuous weakening of the peso.

The country’s outstanding obligation has overshot the national government’s projected debt stock level of P13.43 trillion by the end of this year.

“For the month, [national government’s] total debt increased by P495.54 billion or 3.8 percent primarily due to peso depreciation against the US dollar and the net issuance of government securities to support the budget,” the Bureau of the Treasury (BTr) said in a statement on Thursday.

“At the current level, [national government] debt has increased by P1.79 trillion or 15.2 [percent] since end-December 2021,” it added. The country’s outstanding debt in end-August stood at P13.02 trillion.

The Treasury said about two-thirds of the national government’s outstanding debt were domestic borrowings while the remaining obligations were sourced externally.

The Treasury said that domestic debt stood at P9.3 trillion, which was P357.27 billion or 4 percent higher than its end-August level.

“For September, the increase in domestic debt resulted from the net issuance of government securities amounting to P352.09 billion and the P5.18 billion impact of local currency depreciation against the US dollar,” it explained.

The Treasury noted that the Philippine peso has depreciated against the US dollar from P56.171 in end-August to P58.646 in end-September.

The national government’s projections for its outstanding debt was pegged at a foreign exchange rate range of P52 to P55, based on budget documents.

“Since the beginning of the year, the domestic debt portfolio has increased by P1.13 trillion or 13.8 percent due to continued preference for domestic financing to mitigate the effects of currency fluctuations,” the Treasury said.

During the reference period, the national government’s external debt rose by 3.4 percent on a monthly basis to P4.22 trillion due to the weakening of the peso against the dollar.

“The increment in the level of external debt was due to the P179.69 billion impact of local currency depreciation against the USD,” the Treasury said.

“This was partially offset by the P30.62 billion effect of third-currency depreciation against the USD and net repayment amounting to P10.80 billion,” it added.

On a year-to-date basis, the country’s external debt has increased by P658.3 billion or 18.5 percent “primarily due to local- and third-currency fluctuations that increase the peso value of foreign denominated obligations,” according to the BTr.

Total national government guaranteed obligations increased by P4.46 billion or 1.1 percent month-over-month to P397.22 billion as of end-September 2022.

For September, the increment in guaranteed debt was primarily due to the impact of local currency depreciation amounting to P9.27 billion, offsetting the net repayment amounting to P1.43 billion and P3.48 billion net depreciation effect on third currency denominated guarantees.

From the end-December 2021 level, total national government guaranteed debt has decreased by P26.70 billion or 6.3 percent, according to the Treasury.

The national government’s outstanding debt is expected to further balloon to at least P14.63 trillion by the end of next year. (Related story: https://businessmirror.com.ph/2022/08/22/ng-debt-seen-to-swell-to-p14-63-trillion-by-yearend/)

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