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Outstanding debt rises to P10.13T as of end-Nov.

THE government’s outstanding debt further rose to P10.13 trillion as of end-November as it continued to raise much-needed funds for its efforts to respond to the coronavirus disease 2019 (COVID-19) pandemic.

The Bureau of the Treasury (BTr) on Wednesday reported the total outstanding debt of P10.13 trillion was 1.1% higher than the P10.02-trillion debt as of end-October, due to higher borrowings from domestic lenders.

“From the start of the year, the NG (National Government) debt stock has grown by P2.40 trillion or 31.1% owing to higher funding requirements to respond to the COVID-19 pandemic and other socio-economic measures,” the BTr said in a statement.

The end-November tally represents 99.7% of the government’s projected P10.16-trillion debt stock by the end of 2020.

Around 71% of the total were from domestic sources while the rest were sourced offshore.

Domestic debt stood at P7.192 trillion as of end-November, up 1.6% from the P7.077-trillion level the month prior and 40% higher than the P5.115 trillion a year ago.

The increase was mainly due to the issuance of domestic government securities which went up by 1.8% to P6.65 trillion from the month prior and 30% year on year.

Outstanding external debt slipped by 0.3% month on month to P2.942 trillion as of end-November.

The BTr said the decline was due to the continued appreciation of the peso versus dollar in November, which resulted in P10.74 billion in net effect of currency adjustments. This more than offset the government’s net foreign loan availments worth P2.55 billion, the BTr said.

Year on year, the external debt jumped by 13.4% from P2.594 trillion in November 2019.

Outstanding external debt is composed of loans worth P1.288 trillion and global bonds issued last year worth P1.653 trillion.

The Republic of the Philippines tapped the foreign capital markets three times in 2020 to raise more funds for its pandemic response.

Total government guaranteed obligations, meanwhile, fell by 1.1% month on month to P442.83 billion after the net repayments worth P4.26 billion were made to both local and foreign guarantees. The peso’s appreciation against the greenback also reduced the value of external guarantees by P1.4 billion, which more than offset the P630- million effect of third-currency appreciation on external guarantees.

Year on year, total guarantees went down by 5.3% from P228.1 billion.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a note to journalists on Wednesday that they expect state borrowings to increase further over the coming months as the government borrows more to prop up the economy and fund its mass vaccination drive.

“The Philippines’ external debt-to-GDP ratio is much lower at 25.3% as of 3Q 2020, relatively lower compared to similarly rated countries, thereby also giving the government greater leeway to increase foreign borrowings while managing foreign exchange risks that may entail,” Mr. Ricafort added.

This year, the total debt stock is seen rising further to P11.982 trillion by end-December or 58.3% of GDP as the state borrows more to plug its budget deficit. — Beatrice M. Laforga

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