The government’s outstanding debt swelled to a new record of P13.75 trillion as of end-February 2023, as it borrowed more to finance the budget deficit, the Bureau of the Treasury said Thursday.
Data showed the February debt level was higher than P13.70 trillion registered in January.
The Treasury said in a statement the national government’s total outstanding debt for the month increased by P54.26 billion or 0.4 percent “primarily due to the net issuance of domestic securities.”
It said of the total debt stock, 31.3 percent was sourced externally, while 68.7 percent represented domestic borrowings.
Domestic debt increased by 0.6 percent or P57.22 billion to P9.44 trillion as of end-February from the previous month due to the net availment of domestic financing amounting to P55.88 billion and the P1.34-billion effect of local currency depreciation against the US dollar on onshore foreign denominated securities.
Domestic debt also went up by P233.78 billion or 2.5 percent from the end-December 2022 level.
External debt declined by 0.1 percent or P2.96 billion to P4.31 trillion from the previous month due to the P21.15-billion net repayment of foreign loans and P32.32-billion impact of third-currency adjustments against the US dollar.
These outweighed the effect of local currency depreciation against the US dollar, which amounted to P50.51 billion. Compared to the end of December 2022, the country’s external debt increased by P100.12 billion or 2.4 percent, the Treasury said.
Julito G. Rada
“The latest net borrowings of the national government may reflect the need to finance the budget deficits in recent months, [and] also partly due to higher prices/inflation that also fundamentally bloated government expenditures, higher interest rates that added to the government’s debt servicing costs,” Rizal Commercial Banking Corp. chief economist Michael Ricafort said in a comment.
Ricafort said government debt could further rise in the coming months in view of the upcoming US dollar-denominated or euro-denominated retail bond issuance in the second quarter.
Total government guaranteed obligations decreased by 1.7 percent or P6.64 billion month-on-month to P387.19 billion as of the end of February 2023. The reduction was due to the net repayment of both domestic and external guarantees amounting to P2.56 billion and P3.21 billion, respectively.