The government’s outstanding debt climbed to a record P12.76 trillion in April from P12.68 trillion in March on continued borrowings and the effect of weaker peso, the Bureau of the Treasury said Thursday.
“For April, the national government’s total debt increased by P83.40 billion, or 0.7 percent due to the net issuance of government securities to both local and external lenders and the depreciation of the local currency against the US dollar,” the Treasury said in a statement.
It said that of the total debt stock, 30 percent was sourced externally while 70 percent represented domestic borrowings.
Domestic debt amounted to P8.93 trillion, up by P67.20 billion or 0.8 percent from the end-March 2022 level due to the net availment of domestic financing amounting to P66.30 billion. From the end-December 2021 level, outstanding domestic debt increased P765.44 billion or 9.4 percent.
The government’s foreign debt hit P3.83 trillion as of end-April, up by P16.20 billion or 0.4 percent from the previous month.
“For the period, the increment to external debt was due to the net availment of external loans amounting to P28.56 billion and the effect of peso depreciation against the US dollar amounting to P31.50 billion,” the Treasury said.
This was tempered by adjustments in third currencies amounting to P43.86 billion. The national government’s external debt increased P269.20 billion or 7.6 percent from the end-December 2021 level.
Total government guaranteed obligations also went up by P2.39 billion or 0.6 percent month-on-month to P413.43 billion as of end-April.
“The increment in the level of guaranteed debt was due to the net availment of both domestic and external guarantees amounting to P6.16 billion and P0.12 billion, respectively,” the Treasury said.
Local currency depreciation against the US dollar added P1.84 billion to the total while offsetting the effect of third-currency exchange rate fluctuation amounting to P5.73 billion.
Michael Ricafort, chief economist of Rizal Commercial Banking Corp., said the government’s outstanding debt could still reach new record highs in the coming months in view of additional government borrowings to fund the country’s budget deficit such as the national government’s $559 million Samurai bond issuance in April 2022 and the Japanese government’s JPY30 billion ($230 million) loan to the Philippine government.
Ricafort said the rising trend in interest rates, with long-term interest rates at new pre-pandemic highs recently, could increase interest payments for new borrowings.
He said the incoming administration should sustain the country’s economic and fiscal reform measures, intensified tax collections and good governance/anti-corruption/anti-wastage measures to further improve expenditures.
These would help better manage the country’s budget deficit, fiscal performance and overall debt management, he said.