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PH debt hits a record P13.52T mainly to fund budget deficit

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The country’s total outstanding debt ballooned to a record P13.52 trillion as of end-September 2022 from P13.02 trillion at the end of August as the government borrowed more and the peso weakened against the US dollar, the Bureau of Treasury said Thursday.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said the national debt might still increase to new record highs in the coming months as the government looks for additional sources to finance the budget deficit.

“For the month, NG’s [national government’s] total debt increased by P495.54 billion or 3.8 percent primarily due to peso depreciation against the US dollar and the net issuance of government securities to support the budget,” the Treasury said in a statement.

Of the total debt stock, 31.2 percent was sourced externally while 68.8 percent were domestic borrowings. At the current level, the national government debt was P1.79 trillion, or 15.2 percent higher than it was at the end of December 2021.

Domestic debt amounted to P9.30 trillion, which is P357.27 billion or 4 percent higher than the end-August 2022 level.

“For September, the increase in domestic debt resulted from the net issuance of government securities amounting to P352.09 billion and the P5.18 billion impact of local currency depreciation against the US dollar,” the Treasury said.

Since the beginning of the year, the domestic debt has increased by P1.13 trillion or 13.8 percent due to the preference for domestic financing to mitigate the effects of currency fluctuations.

External debt, meanwhile, amounted to P4.22 trillion, which was P138.27 billion or 3.4 percent higher than it was at the end of August 2022.

“The increment in the level of external debt was due to the P179.69 billion impact of local currency depreciation against the US dollar.

This was partially offset by the P30.62-billion effect of third-currency depreciation against the US dollar and net repayment amounting to P10.80 billion,” it said.

Year-to-date, external debt increased by P658.30 billion or 18.5 percent primarily due to local- and third-currency fluctuations that increase the peso value of foreign-denominated obligations.

As of end-October 2022, data show that the peso depreciated by 13.7 percent or P6.97 against the US dollar since the start of the year.

The peso settled at a record low of 59 per US dollar four times last month, on Oct. 3, 10, 13, and 17, 2022.

Total national government-guaranteed obligations increased by P4.46 billion or 1.1 percent month-over-month to P397.22 billion as of end-September 2022.

For September, the increment in guaranteed debt was primarily due to the impact of local currency depreciation amounting to P9.27 billion, offsetting the net repayment amounting to P1.43 billion and P3.48 net depreciation effect on third currency-denominated guarantees.

However, from the end of December 2021, the national government’s guaranteed debt decreased by P26.7 billion or 6.3 percent.


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