Gov't debt nears P12 T in Oct.
The Philippine government’s outstanding debt nears the P12-trillion mark in October this year due to higher domestic borrowings, the Bureau of the Treasury reported on Wednesday, Dec. 1.
As of October 2021, the national government’s total debt reached P11.971 trillion, up by P54.48 billion compared with P11.917 trillion in the previous month. Year-on-year, the amount accelerated by a hefty 19.38 percent from P10.027 trillion.
Of the total debt stock, 70.7 percent were domestically borrowed, while 29.3 percent was sourced overseas, the treasury data showed.
Domestic debt amounted to P8.47 trillion, which is P80.65 billion higher compared to the end-September 2021 level, driven by additional borrowings from local creditors.
Since the start of 2021, domestic debt has increased by P1.77 trillion or 26.49 percent.
Meanwhile, the foreign debt of P3.5 trillion was P26.17 billion lower from the previous month.
The lower figure for external debt was attributed to the impact of local and foreign currency exchange rate adjustments amounting to P22.68 billion and P8.45 billion respectively.
Year-to-date, the incremental external debt amounted P402.81 billion or 12.99 percent from the start of the year.
On Tuesday, Nov. 30, Finance Secretary Carlos G. Dominguez III as the government’s chief economic manager said that the rising debt is one of the major problems that “must be adequately addressed” by the next administration’s economic team.
Dominguez said the government debt has risen significantly due to heavy tax revenue losses from the pandemic-induced economic slump and the need for government to augment the country’s COVID-19 response.
COVID-19 related loans for the pandemic response and budgetary support to finance the budget deficit have translated into increased financing costs for the government, which now amount to P1.47 trillion.
As of September, the country’s debt-to-gross domestic product ratio was 63.1 percent, the highest in 16 years, government data showed.
But Dominguez noted that this debt ratio remains eminently sustainable, especially as more than two-thirds of the government’s borrowings were sourced from the domestic market.