Gov’t trims debt to P6.39 T

The national government’s debt pile as of end-July slightly went down as compared to the previous month’s level due to lower domestic obligations, data from the Bureau of the Treasury (BTr) showed.

According to the latest data from the Treasury, the government’s outstanding debt stood at P6.39 trillion as of end-July, 0.5 percent lower than the P6.42 trillion in end-June.

The bulk, or P4.15 trillion of the amount came from the domestic market, while the remaining P2.24 trillion came from foreign lenders.

Domestic debt was one percent down from the previous month’s level of P4.19 trillion as the government paid off more debt than what it borrowed.

“Net redemption of government securities worth P40.04 billion lowered the domestic debt level for the month,” the BTr said.

The BTr said this more than offset the impact of peso depreciation, which increased the value of onshore dollar bonds by P30 million. The peso weakened to 50.502 as of end-July from the 50.449 to $1 as of end-June.

On the other hand, the national government’s external debt slightly increased to P2.24 trillion from the P2.23 trillion in the previous month.

“External debt was predominantly driven by foreign exchange fluctuations on both peso and third currency denominated debt that raised the peso value of debt by P2.34 billion and P6.72 billion, respectively,” the Treasury said.

Net repayments of foreign debt only reached P820 million during the period.

Meanwhile, the national government’s guaranteed obligations as of end-July amounted to P495.14 billion as of end-July, up 0.4 percent from a month ago.

“The increment in national government guarantees was due to the combined effect of peso depreciation amounting to P0.30 billion and the effect of third currency revaluation on government guarantees amounting to P2.51 billion,” the Treasury said.

The BTr said these offset the effect of net repayments of both domestic and external guarantees, which stood at P480 million and P370 million, respectively.

Earlier, National Treasurer Rosalia De Leon said the national government’s outstanding debt may reach P6.47 trillion by end-2017, corresponding to 40.76 percent of the projected gross domestic product for the year.

The amount was lower than the P6.526 trillion debt ceiling set by the government, according to the Department of Budget and Management’s Budget of Expenditures and Sources of Financing (BESF) document.