Gov’t debt rises 11% on-year to 16.879 T in March

The national government’s outstanding debt rose anew in March this year due to higher borrowing from the domestic market and weaker local currency against the US dollar, data from the Bureau of the Treasury showed yesterday.

As of March, 2018, the national government’s debt amounted to R6.879 trillion, up by 11 percent from R6.189 trillion in the same period last year.

Of the total stock, 64.92 percent was borrowed domestically, while the remaining 35.08 percent was sourced externally.

In March, domestic debt reached R4.466 trillion, an increase of 12.6 percent year-onyear from R3.968 trillion.

According to the Treasury, the rise in local debt stock was due to the net issuance of government securities along with peso depreciation that affected foreign currency denominated bonds in the domestic market.

Meanwhile, foreign debt jumped 8.6 percent to R2.413 trillion in March from R2.221 trillion a year ago owing to combined effect of peso depreciation and the upward adjustment in third currency- denominated debt.

The net issuance of debt, including the successful inaugural sale of Panda bonds worth $233 million, also pushed up the government’s debt in the offshore markets during the month, the Treasury said.

In March, the peso averaged at R52.25 against the US dollar, weaker compared with R50.22 in the same month last year.

For 2018, the Treasury bureau expects the national government’s outstanding debt to reach R6.994 trillion. Last February, the Department of Finance (DOF) said the debt of the Philippine government’s entire bureaucracy increased by 10.3 percent to R5.8 trillion in the first half of last year from R5.3 trillion in the same period in 2016, owing to higher borrowings. The DOF said that the country’s ratio of general government (GG) debt to the economy, as measured by Gross Domestic Product (GDP), stood at 36.4 percent at end-June last year.

The latest GG debt ratio was slightly higher compared with 35.3 percent in the same period in the previous year, data from the DOF’s Domestic Finance Group (DFG) showed. According to the DFG report, the increase in GG debt ratio reflected the growth in programmed borrowings of the national government.