NG debt rises to new record high of P10.77 T

The national government’s total outstanding debt rose to a new record high of P10.774 trillion in end-March, still mostly domestic borrowings, to fund its pandemic response, the Bureau of the Treasury (BTr) said yesterday.

During the review period, P368 billion was added to the debt portfolio due to net issuance of government securities, an increase of 3.5 percent from February.

Of the total debt stock, the bulk or 72 percent was borrowed from domestic sources while the remaining 28 percent was sourced from foreign creditors.

Domestic debt amounted to P7.744 trillion in March, 5.2 percent higher than the end-February level primarily because of the net issuance of government securities, including the P411.79 billion in Retail Treasury Bonds.

The latest debt figure was nearly 16 percent higher than the end-December 2020 level.

On the other hand, the outstanding external debt of P3.029 trillion in March was 0.4 percent lower than the previous month because of favorable net impact of both local and third currency fluctuations against the dollar amounting to P6.82 billion and P21.88 billion, respectively.

The BTr said these were more than enough to offset the net availment of foreign loans, which amounted to P15.15 billion.

The latest external debt figure was 2.3 percent lower than the end-December 2020 level.

Total guaranteed obligations by the national government, meanwhile, decreased by 2.4 percent to P435.81 billion in March from a month earlier.

The lower level of guarantees was due to the net redemption of both local and foreign guaranteed obligations amounting to P4.84 billion and P1.69 billion, respectively. The country’s debt-to-GDP ratio remains below the internationally acceptable threshold of 60 percent of GDP, effectively giving the government room to spend and borrow more to support the economy.

This year, economic managers expect the debt-to-GDP ratio to rise to as much as 57 percent as borrowings are ramped up to P3 trillion.