Additional domestic and foreign borrowings plus a weaker peso further hiked the national Philippine government’s outstanding debt to a new high of 11.92 trillion pesos ($235 billion) in September.
The latest Bureau of the Treasury data on October 29 showed end-September outstanding obligations climbed 2.4 per cent from 11.64 trillion pesos in August and jumped 27.2 per cent from 9.37 trillion a year ago.
Domestic debt, which accounted for 70.4 per cent of the total, inched up two per cent month-on-month and grew 30.3 per cent year-on-year to 8.39 trillion pesos as of September.
In a statement, the Treasury said locally sourced debt further rose month-on-month on the back of a net issuance of treasury bills and bonds, or a bigger volume of government securities sold in September than those that matured.
A net of 167.45 billion pesos in IOUs were added to the domestic debt pile last month, Treasury data showed.
The external debt stock, meanwhile, rose 3.1 per cent month-on-month and 20.4 per cent year-on-year to 3.53 trillion pesos at the end of the first nine months.
On top of the net of 43.99 billion pesos in foreign loans, which took effect last month, the peso’s depreciation to 50.879 per dollar in end-September from 49.762 against the greenback on August also added 76.82 billion pesos to the national government’s external obligations.
The government tried to minimise these foreign exchange risks by borrowing the bulk of its financing requirements from the local debt market, which continued to ooze with cash despite the prolonged Covid-19 pandemic.
Since the debt stock grew faster than the economy during the first half, debt-to-gross domestic product (GDP) stood at 60.4 per cent as of end-June – above the 60-per cent threshold, which debt watchers considered as a manageable level among emerging markets.
The debt-to-GDP ratio, which reflected an economy’s ability to repay its obligations, had been programmed to end 2021 at a 16-year high of 59.1 per cent, as the national government’s outstanding obligations were expected to settle at 11.73 trillion pesos by year-end.
Amid the pandemic-induced economic slump, lower revenues forced the government to borrow more through concessional loans extended by multilateral banks and bilateral development partners as well as bond issuances in domestic and offshore commercial debt markets.
This jacked up the Philippines’ debt-to-GDP to 54.6 per cent in 2020 from a record-low 39.6 per cent in 2019.
PHILIPPINE DAILY INQUIRER/ASIA NEWS NETWORK