Gov’t debt rises to P6.5 T in Oct

The national government’s debt pile further rose to reach another record high of P6.5 trillion as of end-October mainly due to the impact of the depreciation of the peso against the dollar, data from the Bureau of the Treasury (BTr) showed.

The national government’s outstanding debt as of end October rose 0.9 percent to P6.5 trillion from the previous month’s level of P6.44 trillion.

“The effect of local currency depreciation on foreign currency debt considerably affected the end-month level of (national government) debt,” the Treasury said in a statement.

Last October, the peso depreciated to 51.686 to $1, weaker than last September’s 50.83 to $1.

Despite the increase in debt, the country’s debt-to-GDP ratio declined to 41.7 percent in the third quarter from the 42.4 percent recorded the previous quarter, and 42.1 percent from end-2016, as the country’s growth outpaced rise in obligations.

Of the total debt as of October, the Treasury said P4.22 trillion came from domestic sources. This was 0.7 percent higher than the end-September level of P4.19 trillion due to the net issuance of domestic securities.

“Net issuance of government domestic bonds reached P27.15 billion while the P0.42 billion impact of currency adjustments on onshore dollar bonds added to the increase in domestic debt for the month,” the BTr said.

Obligations from foreign lenders amounted to P2.29 trillion as of end-October, 1.3 percent up from P2.26 trillion the previous month.

The BTr attributed this to the weakening of the peso against the dollar, which translated to an increase of P37.98 billion in external debt.

“This more than offset the impact of net repayments amounting to P1.67 billion and third-currency depreciation against the dollar amounting to P6.69 billion,” it added.

Meanwhile, total guaranteed obligations as of October declined slightly to P489.09 billion from P489.06 billion.

This was due to the effect of net repayments on both domestic and external guarantees amounting to P2.73 billion and P240 million, respectively.

In addition, third currency depreciation brought down government guarantees to P1.86 billion, tempering the P4.83 billion effect of peso depreciation.