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Outstanding debt rises to P10.4 trillion at end-February as gov’t borrowings increase

THE GOVERNMENT’S outstanding debt inched up by 0.8% to P10.405 trillion at the end of February from the month prior, the Bureau of the Treasury (BTr) reported.

Latest BTr data showed the government’s debt stock rose from the P10.327 trillion recorded at end-January, after more borrowings last month. Meanwhile, the debt pile climbed by 27.4% from the P8.166 trillion seen as of February 2020 and by 6.2% from the P9.8 trillion level at the start of 2021.

Of the P10.41-trillion debt stock, 71% were sourced from local creditors and the rest were from foreign lenders.

Outstanding domestic obligations went up by 0.5% from the month-ago level to P7.363 trillion as of February due to increased borrowings that month. Year on year, it jumped by 35.1%.

Since the year started, the local debt pile rose by 10% because of the P540 billion in provisional advances from the Bangko Sentral ng Pilipinas (BSP) in January.

Government securities issued to the domestic market stood at P6.822 trillion last month, up 1.9% month on month and 25.2% higher year on year.

Meanwhile, the external debt stock went up by 1.4% to P3.043 trillion as of February from P3 trillion in January. Year on year, foreign debt grew by 12% from the P2.72 trillion seen at end-February 2020. However, the external debt stock went down by 1.9% since the year began as the government repaid some of its maturing debts.

The BTr attributed the monthly increase in external outstanding debt to the new foreign loans worth P14.53 billion and foreign exchange adjustment worth P36 billion after the peso weakened to P48.653 per dollar last month from P48.076 the month before. However, the net appreciation of the peso versus third currencies trimmed the overall debt by P9.7 billion.

The outstanding foreign debt was comprised of P1.36 trillion in direct loans and P1.68 trillion in global bonds issued so far, broken down into P1.34 trillion in dollar-denominated bonds, P115 billion in euro bonds, P112 billion in Japanese samurai bonds, P85 billion in peso global bonds, and P30 billion in Chinese panda bonds.

Meanwhile, total guaranteed obligations went down by 2.1% from the month prior to P446.72 billion in February after the BTr’s net redemption of local and foreign guarantees worth P9.99 billion and P340 million, respectively.

“Third-currency exchange rate fluctuations further lowered the peso value of external guarantees by P1.77, slightly offsetting the P2.43 billion effect of local currency depreciation against the dollar,” it added.

Year on year, outstanding guaranteed debt fell 7.8% from P484.36 billion.

The country’s outstanding debt was equivalent to 54.5% of gross domestic product (GDP) last year, up from the record low of 39.6% in 2019, after the government ramped up borrowings to plug its ballooning deficit amid the global health crisis.

The government is planning to raise P3 trillion this year from domestic and external lenders to help fund its budget deficit seen to hit 8.9% of GDP.

Official estimates showed the government’s debt stock could rise to P11.98 trillion by end-2021. — B.M. Laforga

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