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NG outstanding debt hits P11 trillion

THE NATIONAL GOVERNMENT’S (NG) outstanding debt breached the P11-trillion mark as of end-May as it increased local borrowings to plug the widening budget deficit, the Bureau of the Treasury (BTr) reported.

Preliminary data from the BTr showed the government’s debt stock inched up by 0.73% to P11.071 trillion as of end-May from its P10.991-trillion level as of end-April.

The debt pile rose by 13% since the year started, after the government borrowed an additional P1.276 trillion.

Year on year, the debt stock jumped by 24.5% from P8.89 trillion as of May 2020.

The increase was largely due to higher domestic borrowings in May, which rose by 1.3% to P7.916 trillion from P7.812 trillion as of end-April. This grew by 31.2% from P6.034 trillion a year ago.

The BTr hiked the volume of securities it issued in the local debt market that month, pushing its outstanding government securities 1.4% higher to P7.376 trillion.

The state’s direct loans from the central bank and other domestic obligations remained steady at P540 billion and P156 million, respectively.

Local outstanding debt accounted for 71.5% of the total debt stock.

Meanwhile, the country’s external debt pile slipped by 0.7% to P3.155 trillion as of May from P3.179 trillion the month prior.

The Treasury said this was due to the government’s settlement of P220 million of its maturing debt, and the impact of peso’s appreciation against the dollar that reduced the value of the debt pile by P28.58 billion.

“These more than offset the P5.24-billion revaluation in the peso value of debt denominated in other currencies such as [euro- and Japanese yen-denominated debt],” the BTr said.

Around P55 billion was added to the government’s foreign debt so far, up 1.8% from P3.1 trillion in end-2020 and by 10.5% from P2.857 trillion as of May 2020.

Broken down, direct loans from foreign lenders totaled P1.369 trillion in May, a tad lower than its value in April.

Outstanding global bonds issued by the government also edged down by 0.6% to P1.787 trillion from P1.798 trillion in April.

This consisted of P1.315 trillion in dollar-denominated bonds, P236.34 billion in euro-denominated papers, P131.2 billion in Japanese yen-denominated bonds, P85.57 billion in peso global bonds and P18.7 billion in Chinese yuan-denominated notes.

The BTr noted that the data were based on the peso’s P47.72 value against the greenback in May, versus the P48.16-per-dollar exchange rate in April.

Total guaranteed obligations of the government also fell by 2% to P426.59 billion as of May from P434.74 billion in the period ending April, and 8.4% lower year on year.

Outstanding local guaranteed debt reached P233 billion as of May, sliding 2.3% from P238.53 billion in April, and 3.2% smaller than its year-ago level.

External guaranteed obligations likewise dipped by 1.3% to P193.58 billion from P196.21 billion in the previous month. Year on year, this was 14% lower.

The government borrows from local and foreign sources to fund its budget deficit seen to widen to 9.3% of total economic output this year. It started ramping up its borrowings last year when the state had to boost spending to support the economy amid a coronavirus pandemic.

Gross borrowings rose by 17% year on year to P1.766 trillion in the five months to May.

The budget deficit narrowed to P200.3 billion in May from P202.1 billion a year ago as the surge in revenues outpaced spending. However, this was nearly five times larger than the P44-billion deficit in April.

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

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