spot_img
28 C
Philippines
Thursday, March 28, 2024

Govt debt rises 2.3% to P5.98t

- Advertisement -

Government debt increased P135 billion or 2.3 percent to P5.98 trillion as of end-July from a year ago, led by higher foreign borrowings, data from the Treasury show.

Finance Secretary Carlos Dominguez III said  the country was in “better shape” to borrow money as the new government planned to accelerate expenditures on infrastructure and human capital. 

Data showed outstanding debt as of end-July rose from P5.847 trillion registered in the same month last year. On a monthly basis, the national government debt increased 0.6 percent, or P34.48 billion, from the June level.

Finance Secretary Carlos Dominguez III

Domestic debt fell 0.3 percent to P3.857 trillion in July from P3.858 trillion a year earlier. The figure, however, increased 0.7 percent or P28.16 billion from the previous month.

The Treasury said the month-on-month increase in local debt fwas due to the P28.12-billion net issuance of government securities and the revaluation of dollar-denominated bonds due to peso depreciation.

- Advertisement -

Of the total domestic debt, P598 million represented loans while the remaining amount pertained to debt securities.

Foreign debt, which accounted for 35.4 percent of national debt, climbed 6.91 percent to P2.125 trillion as of end-July from P1.988 trillion in the same month last year. This was also P6.32 billion higher than June 2016 level. 

“The change was the combined effect of currency fluctuations on US-dollar- and third currency-denominated debt that raised the peso value of outstanding obligations by P3.74 billion and P3.15 billion, respectively. This more than offset the net repayments of external obligations amounting to P0.57 billion,” the Treasury said.

The country’s borrowing program for this year and next year were set at P695.4 billion and P6.954 billion, respectively. 

Dominguez said while foreign borrowings continued to surge for several months now, the government intended to borrow more from domestic debt market to reduce the impact of foreign exchange fluctuations.

“The past two administrations have left this new administration in very good financial shape. In fact one of the first questions when I was asked when I came in, ‘Do you have any money in the treasury?’ I said ‘yes, we have sufficient funds.’ And that’s because the last two administrations managed the economy in an excellent way,” Dominguez told senators.

“We are in a situation where interest rates are low worldwide, and our interest spreads are also at record low due to our past reforms. We also have less risk from foreign exchange borrowings.  Our debt has dropped to below 50 percent of our GDP, and in fact is still falling, so we are in a good position to borrow and spend wisely for our people,” he said.

Latest available data showed debt-to-GDP [Gross Domestic Product] ratio in the first semester of 2016 dropped to 43 percent from 44.9 percent in the same period a year ago.

- Advertisement -

LATEST NEWS

Popular Articles