Gov’t debt burden nearing P11 trillion

Published June 3, 2021, 1:35 PM

by Chino S. Leyco

The unprecedented government borrowings to offset the impact of the pandemic-induced recession have driven public debt to nearly P11 trillion in April this year.

Based on the Bureau of the Treasury report on Thursday, June 3, the national government’s debt burden zoomed 28 percent to P10.991 trillion at end-April from P8.6 trillion in the same month last year.

According to the Treasury, the hefty year-on-year rise was due to “net availment of both local and external financing.”

The debt-financed spending of the Duterte administration during the past 12-months added P2.391 trillion in fresh obligations to the outstanding debt of the government, the document showed.

As the Department of Finance ramps up domestic borrowings, local debt has accelerated by 33 percent to P7.812 trillion from P5.863 trillion in April last year.

Government securities cornered the biggest share in domestic debt as outstanding locally issued IOUs rose 31 percent to P7.203 trillion from P5.562 trillion in the previous year.

Of the total stock, 71.1 percent were domestically borrowed, while 28.9 percent were sourced from external creditors.

Foreign debt registered a new high of P3.179 trillion in April after it increased by 16 percent year-on-year from P2.736 trillion.

Philippine debt papers held by foreign banks were valued at P1.798 trillion, up 13 percent compared with P1.595 trillion last year, while total loans from the government’s development partners rose 21 percent to P1.38 trillion from P1.14 trillion.

Meanwhile, the appreciation of the peso against the US dollar partially offset the increased offshore debt. The local currency averaged at 48.15 versus the greenback in April, stronger compared with 50.44 in the previous year.

Month-on-month, the total debt portfolio inched up by two percent from an end-March level of P10.773 trillion.

Local debt rose 0.9 percent compared with the previous month’s P7.744 trillion, while foreign obligations increased 4.9 percent from P3.029 trillion.

Earlier, the Treasury reported that national government’s total borrowings at end-April hit P1.65 trillion, higher by 35 percent compared with P1.22 trillion in the same period last year.