Gov’t debt swells to P14.35-T in August

The national government’s debt rose by double digits last August, driven by higher borrowings from both local and foreign lenders, the Bureau of the Treasury reported.

The government’s outstanding debt reached P14.349 trillion as of August 2023, a 10 percent increase from P13.021 trillion in the same period last year.

Of the total debt, 68.2 percent was sourced domestically, while 31.8 percent came from external lenders.

Local borrowings amounted to P9.791 trillion, or a 9.5 percent rise from P8.943 trillion in August of the previous year.

Foreign debt surged 12 percent to P4.558 trillion compared to P4.078 trillion a year ago.

Month-on-month, the total debt inched up by 0.7 percent from P14.244 trillion in July.

The slight increase was primarily attributed to the peso’s depreciation against the US dollar, with the exchange rate going from 54.834 to 56.651 during the reference period.

Meanwhile, domestic debt decreased by 0.2 percent compared to the previous month, amounting to P9.812 trillion mainly due to significant retail bond maturities.

In August, new domestic debt issued totaled P229.29 billion, with debt redemption amounting to P253.43 billion, resulting in a net repayment of P24.14 billion.

The Treasury noted that the peso depreciation against foreign currency-denominated domestic securities contributed an incremental value of P2.90 billion.

From the end of December 2022, the government’s domestic debt increased by P582.74 billion or 6.3 percent.

On the other hand, outstanding foreign loans increased by three percent compared to July, reaching P4.432 trillion.

In contrast, the government’s outstanding foreign loans rose by three percent compared to July’s P4.432 trillion.

According to the Treasury, this increase was primarily driven by the depreciation of the peso against the US dollar.

The bureau stated that peso depreciation resulted in a P146.85 billion upward revaluation of US dollar-denominated debt in August.

However, this was partially offset by a downward revaluation of the third-currency debt component, amounting to P22.11 billion.

Additionally, net availment of foreign loans contributed P1.78 billion to the external debt stock for the reference month.

Since the beginning of the year, external debt has grown by P347.98 billion or 8.3 percent.

The government’s debt level at the end of August is only 1.88 percent below the full-year target of P14.623 trillion set by the Marcos administration.

Looking ahead to 2024, the government expects that its financial obligations will reach P15.842 trillion.