The national government’s outstanding debt surged P450 billion in August, or 4.9 percent, to P9.615 trillion from the end-July 2020 level following the net issuance of domestic securities, the Bureau of the Treasury said Wednesday.
Data showed the NG debt stock also increased by P1.883 trillion, or 24.4 percent, from the end-December 2019 level. Of the total outstanding debt stock, 30.2 percent were sourced externally while 69.8 percent were secured in the local credit market.
Domestic debt increased by P456.53 billion, or 7.3 percent, in August to P6.713 trillion, from the end-July level with the net issuance of domestic government securities.
Domestic borrowing of the national government in the first eight months reached P2.5 trillion as of end-August. Of the total new issuances, P925.38 billion were in Treasury bills, P447.86 billion were in Treasury bonds and P827.11 billion in retail treasury bonds.
It also included the P300-billion short-term borrowing from the Bangko Sentral ng Pilipinas through a repurchase agreement.
Gross debt maturities reached P914.08 billion (P540.08 billion for T-bills and P374 billion for T-Bonds).
Domestic debt increased by P1.585 trillion or 30.9 percent since the beginning of the year.
Meanwhile, the national government’s external debt of P2.902 trillion was P5.65 billion or 0.2 percent lower than the previous month.
“For August, the decline in external debt was attributed to the P37.36-billion net effect of local currency appreciation. Meanwhile, net availment of external loans added P27.07 billion alongside the P4.64 billion effect of appreciation on third-currency denominated external loans,” the Treasury said.
The national government’s external financing registered an inflow of P509.69 billion in the first eight months, compared to the debt repayment of P117.04 billion. For the period, project loan availment totaled P17.09 billion ($350 million) while program loans amounted to P306.54 billion ($6.32 billion).
Offshore bond issuances reached P186.06 billion ($3.84 billion). From the start of the year, national government external debt increased by P298.32 billion or 11.5 percent.
BSP Governor Benjamin Diokno assured that the country has the capacity to continue paying its foreign debts as the gross international reserves now stand at nearly $100 billion, the highest on record despite the pandemic.
“There is no threat that we cannot pay our debts... We have plenty of US dollars,” Diokno said during the “Laging Handa” briefing over government television station PTV-4.
Based on the latest BSP data, gross international reserves rose by $350 million to a record $98.95 billion as of end-August from the end-July 2020 level of $98.6 billion.
Diokno said the end-August 2020 GIR level represents a more than adequate external liquidity buffer, which can cushion the domestic economy against external shocks.
Meanwhile, the country’s total outstanding external debt as of end-June increased by $6 billion, or 7.4 percent, to $87.5 billion from $81.4 billion as of end-March 2020, as the government sourced funds for COVID-19 response projects.
External debt refers to all types of borrowings by Philippine residents from non-residents, following the residency criterion for international statistics.
Diokno said in the same briefing that the peso continued to appreciate against the US dollar and is currently one of the strongest currencies in Asia and the world.
“There is a strong confidence on the peso. That is why it continues to appreciate. Right now it stands at 48.50 per dollar. I think it will hover around 48.50 to 48.70,” he said.
Diokno said economic reforms by the government should continue to ensure that the economy recovers from the impact of the health crisis.