By Chino S. Leyco
The national government’s (NG)total debt inched up in November last year owing to higher domestic borrowings to take advantage of strong market demand, the Bureau of the Treasury reported yesterday.
The treasury bureau reported that the national government’s outstanding debt reached P7.195 trillion as of November 2018, slightly higher by 0.4 percent compared with P7.167 trillion in the previous month.
Year-on-year, the total debt obligations rose 12 percent from P6.437 trillion owing to foreign exchange losses after the peso weakened to P52.39 against the US dollar from P50.34 a year ago.
Of the total debt stock, 65.4 percent was borrowed domestically, while remaining 34.6 percent was sourced from external sources.
Local debt amounted to P4.707 trillion, up by two percent compared with P4.62 trillion end-October 2018 level.
“For the month, the registered increase in domestic debt was due to the net issuance of government securities amounting to P88.33 billion as the committee fully awarded treasury bonds amid strong market demand,” the treasury said.
“This was slightly offset by the appreciation of the peso that decreased the value of onshore dollar bonds by P0.57 billion,” the bureau added.
For external debt, it amounted to P2.487 trillion, lower by 2.3 percent month-on-month due to the impact of the stronger peso along with net repayments on foreign obligations.
However, the treasury said the favorable offshore condition “was slightly tempered by the net appreciation of third-currency denominated external debt amounting to P0.21 billion.”
Meanwhile, the total government guaranteed obligations declined by 2.7 percent month-on-month to P471.80 billion in November.
“The reduction in NG guarantees was due to the impact of currency fluctuations on both dollar and third-currency denominated external guarantees amounting to P6.22 billion and P0.75 billion, respectively,” the treasury said.
“While net availments on external guarantees added P0.13 billion, this was offset by the net redemptions of domestic guarantees amounting to P6.08 billion. From the end-December 2017 level, NG guarantees has decreased by P6.31 billion or 1.3 percent,” it added.