Gov’t debt at end-April rises to P6.37 trillion

THE government’s outstanding debt as of April hit P6.37 trillion, driven primarily by the retail treasury bonds issued mid-April, the Bureau of the Treasury (BTr) said yesterday.

The national government’s outstanding debt in the first four months of the year rose P180.55 billion or 2.9% compared with end-March.

Year on year, the total rose P486.49 billion, or 8.3%.

Some 65% of the current outstanding debt, or P4.160 trillion, was sourced domestically, up 4.8% from a month earlier and up 10.4% from a year earlier.

“Domestic debt levels were driven by the net issuance of government securities amounting to P192.48 billion, including P181 billion in 3-year Retail Treasury Bonds,” the Treasury bureau said in a statement.

“The increase was slightly tempered by the stronger peso which reduced the value of onshore dollar bonds,” it added.

The peso strengthened to P49.90 against the dollar as of end- April, from the P50.219a- dollar level recorded at endMarch.

The other 35% of the debt or P2.210 trillion was sourced from external creditors, down 0.5% from a month earlier and down 4.5% year on year.

“Factors causing external debt to slightly increase for the period include the revaluation in 3rd currency- denominated debt worth P0.32 billion and net availments amounting to P2.01 billion,” BTr said.

“However, these were dwarfed by the effect of the stronger peso which reduced the value of external obligations by P14.11 billion,” it added.

National governmentguaranteed ( NG) obligations decreased by P21.72 billion or 4.2% month on month to P495.08 billion in April, and were down 12.3% from a year earlier.

“The reduction was principally due to net repayments of domestic guarantees amounting to P19.33 billion alongside the P2.26 billion effect of peso appreciation and third currency revaluation on foreign guarantees. From the end- December 2016 level, NG guarantees have gone down by P18.59 billion or 3.6%.”

The government borrows from local and foreign creditors to finance its budget deficit and pay maturing debt.

This year, the government is planning for a 3% budget deficit, and to ramp up infrastructure spending which it hopes will help the economy grow by 7- 8% annually starting next year, until 2022.

Budget Secretary Benjamin E. Diokno has said that he expects the debt- to- GDP ratio to shrink to 35% by 2022, supported by cheap borrowing costs and rapid economic growth.