By Aubrey Rose A. Inosante, Reporter
THE NATIONAL Government’s (NG) outstanding debt rose to a fresh high of P16.63 trillion as of end-February, the Bureau of the Treasury (BTr) reported.
Latest data from the BTr showed that the debt jumped by 1.96% from P16.31 trillion at the top of January.
Yr on 12 months, outstanding debt went up by 9.57% from P15.18 trillion as of end-February 2024.
“The rise was primarily driven by the online issuance of recent domestic and external debt to support more public programs and projects,” the BTr said in an announcement on Tuesday.
Despite hitting one other record high, the Treasury said the outstanding debt “stays manageable.”
NG debt is the full amount owed by the Philippine government to creditors akin to international financial institutions, development partner-countries, banks, global bondholders and other investors.
“Nevertheless, the rise was partially offset by the strengthening of the peso against the US dollar, which appreciated from P58.375 at the top of January to P57.99 at the top of February, helping manage foreign debt obligations,” it added.
The majority or 67.5% of the full debt was owed to domestic creditors, while the remaining was owed to foreign creditors.
“This financing mix reflects a prudent approach to debt management to assist mitigate exposure to external risks while benefiting from the country’s liquid domestic market,” the BTr said.
Domestic debt, which was composed of presidency securities, increased by 1.26% to P11.22 trillion as of end-February from P11.08 trillion as of end-January.
Yr on 12 months, it also rose by 6.12% from P10.58 trillion in February 2024.
“This was mainly because of P140.72 billion in net domestic financing, because the P268.25-billion gross issuance of presidency securities exceeded redemptions of P127.53 billion for the month,” the BTr said.
Nonetheless, the rise in domestic debt was tempered by the peso appreciation against the US dollar, which reduced the general valuation by P1.1 billion.
Meanwhile, external debt rose by 3.44% to P5.41 trillion from P5.23 trillion within the previous month.
Yr on 12 months, foreign debt climbed by 17.52% from P4.6 trillion.
“This was attributed to the online availment of foreign borrowing amounting to P193.71 billion and the P20.41-billion net appreciation effect on third currency-denominated debt,” the BTr said.
“Nonetheless, these aspects were partially offset by a P34.48-billion reduction because of the peso appreciation against the US dollar,” it added.
External debt was composed mainly of P2.53 trillion in loans, and P2.88 trillion in government securities.
“For the month, the NG secured a complete of P197.3 billion in external financing, including P190.82 billion through a triple-tranche global bond issuance comprised of 10- and 25-year USD bonds ($2.25 billion), and 25-year EUR bonds (1 billion euros) and P6.48 billion in project loans,” the Treasury said.
The BTr said the project loans will fund rail projects through the Japan International Cooperation Agency (P3.86 billion) in addition to physical connectivity and health sector efforts with the Asian Development Bank (P1.71 billion).
For February, NG-guaranteed obligations slipped by 1.49% to P341.11 billion as of end-February from the end-January level of P346.27 billion.
Yr on 12 months, it fell by 1.11% from P344.93 billion.
“The decrease resulted from the online repayment of each domestic and external guarantees, amounting to P5.83 billion and P0.15 billion, respectively,” the BTr said.
Nonetheless, this was partially offset by the P1.43-billion net appreciation effect on third currency-denominated guarantees, it added.
Oikonomia Advisory and Research, Inc. Economist Reinielle Matt M. Erece said the rise within the debt level reflected recent government borrowings.
“This trend may proceed this 12 months as the federal government plans to borrow again, mainly from domestic sources, to support their programs,” he said.
“Furthermore, the forecasted peso depreciation against the US dollar may inflate the dollar value of foreign debt,” Mr. Erece added.
He also said the debt continues to be manageable “so long as the federal government continues to reinforce its revenue generation, and (economic) growth exceeds the expansion in expenditures.”
Rizal Business Banking Corp. Chief Economist Michael L. Ricafort said the upper NG debt level is because of the necessity to finance the budget deficit.
“There’s a must bring down the share of debt servicing costs as a percentage of the full national budget as a test of the necessity for more tax reform and other fiscal reform measures to structurally narrow the budget deficit and curb the expansion in overall debt in view of the big borrowings/debt because the COVID-19 pandemic,” he said.
Mr. Ricafort said there may be a must bring the NG debt-to-gross domestic product (GDP) ratio below the international threshold of 60%.
Outstanding debt as a share of GDP inched as much as 60.7% as of end-2024 from 60.1% a 12 months earlier.
The NG’s outstanding debt is projected to succeed in P17.35 trillion by end-2025.
