The national government debt climbed to a record P14.24 trillion as of end-July 2023 from P14.15 trillion in June on the increased public borrowing to finance the budget deficit, the Bureau of the Treasury said Friday.
“The NG’s [national government’s] total debt stock increased by P96.44 billion or 0.7 percent month-over-month, primarily due to the net issuance of domestic securities,” the Treasury said in a statement.
It said of the total debt stock, 31.1 percent was sourced externally, while 68.9 percent represented domestic borrowings.
“Debt as a percentage of GDP improved to 61.0 percent as of end-June 2023 from 62.1 percent a year ago as economic conditions continue to recover from the impact of health and geopolitical events,” it said.
Domestic debt amounted to P9.81 trillion, P109.54 billion or 1.1 percent higher than the end-June 2023 level.
“The increment in the domestic portfolio was attributed to the P110.39 net issuance of government bonds driven by the government’s financing requirements, offsetting the P0.85 billion effect of local currency appreciation against the US dollar on onshore foreign currency-denominated securities,” the Treasury said.
External debt reached P4.43 trillion, down by P13.10 billion or 0.3 from the previous month. “For July, the reduced debt was due to the effect of peso appreciation against the US dollar amounting to P42.87 billion. This more than offset the P9.97 billion net impact of third-currency fluctuations against the US dollar and P19.81 billion net availment of foreign loans,” it said.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the new record-high outstanding national government debt could be attributed to “wider budget deficit amid higher inflation that also bloated government expenditures, higher interest rates that raised borrowing costs of the government, weaker peso exchange rate vs. the US [dollar] in recent years that raised the peso equivalent of the government’s foreign debts and continued increase in infrastructure spending.”