Weaker peso raises July outstanding debt to

The national government’s outstanding debt grew at a faster pace in July this year due to the depreciation of local currency against the US dollar, data from Bureau of the Treasury showed.

As of July 2015, the treasury reported that the national government’s debt increased by 2.9 percent to 5.847 trillion from 5.683 trillion in the same month a year ago.

The increase in debt was primarily due to the 3.2 percent year-on-year hike in foreign debt.

From January to July alone, the weaker local currency has caused the government’s external debt to expand by 3.8 percent, equivalent a 73.71 billion.

“The increase in external debt was mainly due to the depreciation of peso against the dollar resulting in the upward adjustment of the peso value of dollar debt,” the treasury said in a statement.

Offshore debt now stood at 1.988 trillion at end-July, higher than the 1.925 trillion incurred in the previous year.

“However, this [stronger US dollar] was tempered by the downward revaluation of third currency debt against peso equivalent to 6.74 billion,” the treasury said.

Yesterday, the local currency hit 47 to the dollar in early trading, the first time since 2010.

Meanwhile, domestic debt also rose 2.9 percent to 3.858 trillion from 3.757 trillion in the same period in 2014.

Month-on-month, government debt in the local market slightly grew 0.5 percent from 3.839 trillion.

On the other hand, the government’s guaranteed obligations amounted to 402.64 billion as of July, reflection a 0.2 percent increase from the previous month’s level.

“The increase in guaranteed obligation was due to the combined effect of currency adjustments which raised the peso value of debt by 2.62 billion and net availment on external guarantees amounting to 0.01 billion,” the treasury said.

From January to July, the national government guaranteed debt has decreased 5.5 percent or 23.56 billion.

For 2015, the national government expects its total debt would reach 6.216 trillion, and it is seen to increase further next year by 3.3 percent to 6.422 trillion.

Next year, the national government is looking at 1.953 trillion in foreign debt, and 4.469 trillion obligation in the domestic market.

Earlier, the Department of Budget and Management said the national government was planning a gross borrowing of 674.8 billion next year, lower compared with 710.8 billion ceiling this year.