NG debt reaches P10.4 trillion in Feb.

Published March 29, 2021, 5:22 PM

by Chino S. Leyco

About P94,589 is every living Filipino’s share of the national government debt as of February, that is P20,000 more.

The Bureau of the Treasury reported on Monday, March 29, that the outstanding debt stock of the national government now stood at P10.405 trillion in February, or additional P2.24 trillion compared with P8.165 trillion in year ago.

While the treasury bureau did not categorically cited the government’s coronavirus response as reason for the hefty increase, the agency noted that its debt portfolio rose “due to net financing from local and external sources and current fluctuations.”

Government debt held by local creditors reached P7.363 trillion as of February, up by 35 percent from P5.449 trillion a year ago.

Foreign debt, meanwhile, increased by 25 percent to P6.822 trillion from P5.449 trillion in February 2020.

In the first two-months of the year, the Duterte administration incurred P610.83 billion in new debt, or 10 percent increase from the end-December level of P9.795 trillion.

The treasury bureau said the rise in year-to-date debt was due to the P540 billion provisional advances availed by the national government from the Bangko Sentral ng Pilipinas last January.

In 2020, the national government’s debt ratio soared following its record budget deficit incurred last year due to unprecedented borrowings for the country’s coronavirus response.

The ratio of the national government outstanding debt to the country’s economy, as measured by gross domestic product (GDP), stood at 54.5 percent last year, an acceleration from only 39.6 percent in the previous year.

Compared with its Southeast Asian peers, the Philippines registered a slightly higher debt ratio against the regional average of 51.5 percent. Indonesia at 38.5 percent, Vietnam at 46.6 percent, Thailand at 50.4 percent and Malaysia at 67.6 percent. 

From a pure risk perspective, higher debt ratios make it more difficult to borrow money while a low debt ratio suggests greater creditworthiness.