Outstanding government debt jumped P2.24 trillion or 22 percent over the past 12 months to reach a record P10.405 trillion as of end-February, data from the Treasury show.
The Treasury said government debt also increased P78.37 billion or 0.8 percent from P10.33 trillion in January.
“For the month, P78.37 billion or 0.8 percent was added to the debt portfolio due to net financing from local and external sources and currency fluctuations. Of the total debt stock, 29 percent were sourced externally while 71 percent are domestic borrowings,” the Treasury said in a statement.
Domestic debt amounted to P7.363 trillion as of end-February, P37.51 billion or 0.5 percent higher than the end-January 2021 level because of net availment of domestic financing.
Data also showed that from the end-December 2020 level, outstanding domestic increased by P668.38 or 10 percent which included the P540-billion provisional advances availed from the Bangko Sentral ng Pilipinas in January 2021.
The external debt of P3. 042 trillion was P40.86 billion or 1.4 percent higher from the previous month.
“For February, the increment to external debt was due to the net availment of foreign loans amounting to P14.53 billion and the P36.03 billion effect of local currency depreciation against the dollar,” the Treasury said.
Meanwhile, the net appreciation of the peso against third currencies trimmed the debt level by P9.70 billion. For the year, external debt declined by P57.55 billion or 1.9 percent mainly due to debt repayment.
Total government guaranteed obligations decreased by P9.67 billion or 2.1 percent month-on-month to P446.72 billion in February. The lower level of guarantees was due to the net redemption of both local and foreign guarantees amounting to P9.99 billion and P0.34 billion, respectively.
Third-currency exchange rate fluctuations further lowered the peso value of external guarantees, slightly offsetting the P2.43 billion effect of local currency depreciation against the dollar.
The Department of Finance earlier said the prudent management of the country’s debt obligations would reduce the possible risks from debt exposure.
It issued the statement following latest reports showing that the national government’s debt-to-GDP ratio climbed from 39.6 percent in 2019 to 54.5 percent in 2020, mainly on the government’s move to source funds for COVID response efforts.
The DOF said the prevailing lower interest rates environment helped cushion its fiscal impact.
“As long as debt is managed prudently, the risks from debt exposure are minimized and additional resources continue to be obtained for projects that contribute favorably to development,” the DOF said.