By Chino S. Leyco
The government debt as a percentage of the Philippine economy slid below the target last year despite higher borrowings and weaker peso against the US dollar, the Bureau of the Treasury reported yesterday.
According to the Treasury, the government’s debt-to-gross domestic product (GDP) ratio settled at 41.9 percent last year, lower than the programmed 42.1 percent for 2018.
“The lower debt-to-GDP ratio is due to the moderate increment in debt as a result of prudent cash and debt management and steady economic growth,” the Treasury said.
But despite the decline in debt ratio, the national government’s outstanding debt was recorded at P7.292 trillion as of end-December 2018, up by 9.6 percent from its level a year ago.
Month-on-month, the debt also registered a 1.35 percent rise.
Of the total debt stock, 34.5 percent was sourced externally while 65.5 percent were borrowed onshore.
The domestic debt amounted to P4.776 trillion, an increase of 1.5 percent compared to the end-November 2018 level.
For the month of December, the rise in domestic debt level was due to the net issuance of government securities amounting to P68.79 billion and peso depreciation that increased the value of onshore dollar bonds by P0.08 billion.
Domestic debt has increased by 7.6 percent more than the end-2017 level.
Meanwhile, the external debt of P2,515.64 billion is 1.2 percent higher from the previous month’s level.
During the month, foreign exchange fluctuations on both dollar and third-currency denominated debt contributed the biggest increment to external debt amounting to P8.26 billion and P14.33 billion, respectively, along with net availments on foreign loans which added P6.02 billion.