The nation government’s debt stock advanced at a much slower pace in August as debt repayments to foreign creditors softened the increase in domestic borrowings, data from the Bureau of the Treasury showed.

The national government’s outstanding obligations reached P11.642 trillion as of August this year, a marginal increase of less than one percent compared with P11.61 trillion in the previous month.

Last July, the government debt stock jumped by a hefty four percent month-on-month, equivalent to P444.4 billion.

However, the latest outstanding loans soared 21 percent or P2.027 trillion from P9.615 trillion in August 2020.

Based on the Treasury report, the P32 billion additional debt incurred in August was mainly driven by domestic borrowings as part of the government’s financing program.

Debt-papers held by Philippine-based creditors inched up by 1.2 percent to P8.22 trillion from P8.119 trillion in July. Year-on-year, local obligations jumped 22.5 percent from P6.713 trillion.

Since the beginning of 2021, domestic obligations went up by P1.53 trillion or 23 percent.

Meanwhile, foreign loans declined by two percent from P3.490 trillion in July to P3.422 trillion the following month.

The Treasury said the lower external debt figure was due to the net repayment of foreign loans amounting to P34.22 billion.

Likewise, the impact of both local- and third-currency fluctuations against the US dollar further lowered the peso value of external obligations by P32 billion and P2.4 billion, respectively.

The peso appreciated against the US dollar from 50.223 in July to 49.762 in August.

The government foreign debt has increased by P321.9 billion or 10 percent from the end-December 2020 level.

Moreover, offshore obligations of the government jumped 18 percent from P2.902 trillion in August 2020.

But despite faster uptick government debt, Finance Secretary Carlos G. Dominguez III said this level of obligations is still considered manageable, based on the debt-to-gross domestic product (GDP) matrix.

Dominguez explained that governments around the world registered higher borrowings since the pandemic began last year but what sets the Philippines apart “is that we entered 2020 with a historic low debt-to-GDP ratio of 39.6 percent.”

The country’s debt-to-GDP rose to 60.4 percent as of end-June 2021, but credit raters still consider this manageable, the finance chief said.

Based on the Department of Finance’s estimates, the national government’s outstanding debt will hit a record-high P13.41 trillion by end of 2022.

In 2021, the outstanding debt is projected to reach P11.55 trillion by yearend, up from P9.79 trillion at end-2020.