GOVT DEBT BALLOONS TO P11.6T AT END-JULY
THE national government’s outstanding debt ballooned to P11.61 trillion as of end-july this year, soaring by 26.7 percent from trillion a year ago.
Latest data from the Bureau of the Treasury showed the outstanding debt level was also 18.5 percent higher than the P9.795 trillion as of end-2020.
Month-on-month, it was also up by 4 percent from P11.166 trillion in June this year.
Of the total debt stock, the bulk or 69.9 percent comprised domestic borrowings while the remaining 30.1 percent was sourced externally.
Domestic debt has so far reached P8.12 trillion, swelling by 29.8 percent year-on-year from P6.26 trillion in July 2020.
Since the start of the year, domestic debt has grown by 21.3 percent from P6.69 trillion as of end-2020 owing to heightened financing requirements.
This was also a 2.3-percent uptick from P7.94 trillion in the previous month as a result of the net issuance of government securities.
On the other hand, external debt as of end-july this year stood at P3.49 trillion, up by a fifth from P2.91 trillion in July 2020.
From the end-2020 level of P3.1 trillion, external debt has already increased by 12.6 percent.
Compared to P3.23 trillion in June this year, external debt went up by 8.2 percent due to the net availment of foreign loans.
Moreover, the Treasury said both local and third-currency exchange fluctuations against the US Dollar added to the external debt P100.66 billion and P3.39 billion, respectively.
Meanwhile, the outstanding guaranteed debt of the national government as of end-july fell to P444.3 billion from P458.83 billion a year ago.
It was also down by 3.1 percent from the end-december 2020 level of P458.35 billion.
Nonetheless, total guaranteed debt inched up by 1.3 percent month-on-month from P438.6 billion in June this year due to the impact of local and third-currency exchange f luctuations against the US Dollar amounting to P6.07 billion and P1.25 billion, respectively.
However, net repayments on both domestic and external guarantees were able to offset P1.62 billion.
The government borrows to meet its spending requirements as well as to finance its budget deficit.
The economic team sees the national government’s budget deficit this year to reach P1.86 trillion or 9.3 percent of GDP, even higher than the P1.37 trillion or 7.6 percent of GDP in 2020. In 2019, the budget deficit stood at P660.2 billion or 3.4 percent of GDP.
Meanwhile, the national government expects its outstanding debt this year to balloon to P11.73 trillion, up by 19.8 percent from P9.795 trillion in 2020. This is also projected to further swell in 2022 to P13.42 trillion.
In terms of debt as a percentage of GDP, the debt-to-gdp ratio as of end-2020 rose to 54.6 percent, jumping from a record-low 39.6 percent in 2019.
As of end-june this year, the debt-to-gdp ratio already stood at 60.4 percent.
Dominguez earlier said the debt-to-gdp ratio this year is projected to rise to 59.1 percent and peak next year at 60.8 percent— slightly above the internationally accepted threshold—before gradually tapering off to 60.7 percent and 59.7 percent in 2023 and 2024.
The Department of Finance sees the national government returning to its pre-pandemic debt and budget deficit levels as early as 2024 or by 2025 if the recommended fiscal measures are passed early by the next administration and if the economy quickly recovers.