Government debt ends 2017 at record P6.652 trillion

NATIONAL GOVERNMENT debt ended 2017 at a record P6.652 trillion, up 9.2% from a year earlier, though debt as a proportion of the economy remained steady, the Bureau of the Treasury (BTr) said in a statement.

The year-end total was up 3.34% from the end of November and breached the government’s P6.47 trillion borrowing target laid out in the 2018 Budget of Expenditures and Sources of Financing.

As a proportion of gross domestic product (GDP), debt was equivalent to 42.1%, breaching the 40.7% target set by the Development Budget Coordination Committee ( DBCC) in June.

“With full- year GDP growth of 6.7%, the stable performance of the economy has maintained the debt-toGDP level from a year ago,” the BTr said.

“The difference compared to the program is due to the lower- thanDBCC-target nominal GDP and the successful issuance of RTB ( Retail Treasury Bonds) in December to prefund some of the 2018 financing requirement,” it added.

Some 67% of the total was owed to domestic creditors while 33% was owed to foreign creditors.

About P4.44 trillion worth of government securities were awarded last year, up 12.9%.

This includes the two RTB issuances in 2017, raising P181 billion in April, and P255.4 billion in December.

Government direct and assumed loans on the other hand grew 58.5% to P948 million.

External debt on the other hand rose 2.6% from 2016 totals, “due to P25.2 billion net issuance for the year and the effect of currency adjustments (P8.2 billion for local currency depreciation and P20.9 billion for thirdcurrency depreciation).”

However, external debt fell 0.8% from P2.23 trillion at the end of November.

“Lower external debt for December was due to peso appreciation against the dollar which reduced the peso value of debt by P17.18 billion alongside net repayments worth P3.40 billion. This was tempered by third-currency appreciation against the dollar amounting to P2.58 billion,” the BTr said.

Government securities issued overseas last year grew 1.7% to P1.36 trillion, while direct loans increased 4% to P847.11 billion.

The government borrowed P1.19 trillion from the US, P44.5 billion from Japan, and P129.68 billion from other countries through peso global bonds.

This year, the government has set a debt target of P6.99 trillion. It also projects overall debt to decline to 37.9% of GDP by 2022. —