THE Philippines’s outstanding debt has climbed to P13.911 trillion, the highest in the country’s history, on the back of more external borrowing worsened by the depreciation of the local currency, according to the Bureau of the Treasury (BTr).
The country’s outstanding obligations as of end-April rose by 9 percent from the P12.763 trillion recorded in the same month last year, based on Treasury data.
Likewise, it was P54.24 billion higher than the P13.856-trillion debt registered in March, Treasury data also showed.
“[National Government] outstanding debt increased by P54.24 billion or 0.4 percent from the previous month due to the net issuance of external debt and local currency depreciation against the US dollar,” the Treasury said.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the latest outstanding debt of the country “reflects” the “need” to finance “wider” budget deficits in recent months.
“Higher prices/inflation…also fundamentally increased/bloated government expenditures, higher interest rates/financing costs that added to the government’s debt servicing costs, still relatively weaker peso exchange rate vs. the US dollar compared to a year ago that increased the peso equivalent of the national government’s outstanding debts,” Ricafort added.
Treasury data showed that the Philippine Peso weakened in April against the US dollar as the average exchange rate stood at P55.497 compared to P54.318 in March.
Ricafort said fresh record highs for the country’s outstanding debt in the coming remain possible as the national government is set to issue US dollar-denominated or Euro-denominated retail bond issuances in the third quarter.
“New official development assistance [ODA] and other multilateral funding especially for the country’s various infrastructure projects would also add to the country’s outstanding national government debt in the coming months, as infrastructure spending as a [share] of GDP increased to more than 5 percent in recent years and likely to be sustained as a policy priority,” he added.
The Treasury said 32 percent of the country’s outstanding debt as of end-April was sourced externally while 68 percent came from domestic borrowings.
The national government’s domestic debt during the reference period stood at P9.46 billion while external debt amounted to P4.45 trillion, according to the Treasury.
The Treasury said the national government’s outstanding domestic debt was slightly lower than the P9.513 trillion recorded in March, but was 5.8 percent over the P8.935 trillion recorded in April 2022.
“This was slightly offset by the P2.47-billion effect on onshore foreign currency-denominated securities caused by peso depreciation against the US dollar,” it said.
“From the end-December 2022 level, [national] domestic debt has increased by P249.45 billion or 2.7 percent,” it added.
Meanwhile, the country’s external debt was 2.5 percent higher than the previous month’s P4.343 trillion and was 16.4 percent than the P3.827 trillion recorded amount last year, according to the Treasury.
“For April, the increment to external debt was due to the P27.98-billion net availment of external loans and P94.28-billion impact of local-currency depreciation against the US dollar,” it said.
“On the other hand, third-currency adjustments against the US dollar trimmed P12.30 billion from the peso value of foreign currency debt,” it added.
The Treasury noted that the national government’s external debt has increased by P242.83 billion or 5.8 percent from the end-December 2022 level.
Meanwhile, the national government’s guaranteed obligations fell slightly to P380.69 billion from P384.12 billion in March. It was also nearly 8 percent lower than the P413.43-billion guaranteed obligations recorded in April of last year.
“For the month, the lower level of guaranteed debt was due to the net repayment of domestic guarantees amounting to P5.51 billion and third-currency adjustments amounting to P1.87 billion,” the Treasury said.
“These were tempered by the impact of local currency depreciation amounting to P3.95 billion,” it added.