By Chino S. Leyco
The national government’s debt increased at end-April this year due to higher borrowings from local domestic market as well as weaker peso against the US dollar, data from the Bureau of the Treasury showed yesterday.
As of April 2019, the outstanding debt of the state amounted to P7.786 trillion, up by 13 percent compared with P6.874 trillion in the same period last year. Of the total stock, 66.8 percent were borrowed domestically, while the balance 33.2 percent was sourced from external markets.
Based on the treasury report, debt in the local market jumped 16 percent year-on-year to P5.205 trillion in April from P4.499 trillion a year ago, while offshore obligations rose nine percent from P2.375 trillion to P2.581 trillion.
According to the treasury, the increase in debt was owing to higher borrowing requirement of the national government to bridge its projected budget deficit and revaluation of onshore dollar bonds.
The local currency weakened last April, averaging at 52.098 against the US dollar from 51.734 in the same month last year.
The stronger US dollar also raised the national government’s debt obligation in the overseas markets.
Last week, Finance Undersecretary Gil S. Beltran reported that the proportion of the national government’s debt to the country’s whole economy improved to 44 percent in the first three-months of the year amid higher domestic borrowings.
Beltran said the debt-to-GDP ratio expanded to 44 percent at end-March from 42.6 percent in the same period last year.
The finance official attributed the rise to the government’s shift to local sources of borrowings, which increased the domestic debt-to-GDP ratio to 29.3 percent from 27.6 percent in the same quarter of 2018.
This outpaced the drop in external debt, whose share to GDP declined to 14.7 percent from 14.9 percent.
With this strategy, Beltran said the government was able to reduce foreign exchange risks.