Gov’t debt decreases to P11.93-T in Nov.

Published December 29, 2021, 3:06 PM

by Chino S. Leyco

The national government’s debt declined last month due to repayments and favorable foreign exchange, the Bureau of the Treasury reported on Wednesday, Dec. 29.

The total outstanding debt of the government slightly went down by P39.7 billion or 0.3 percent to P11.931 trillion in November from P11.971 trillion in October this year.

Based on the treasury data, the decline in debt was primary driven by the P26.9 billion redemption of government securities, or IOUs, held by local creditors.

In addition, stronger peso also helped in lowering the government’s foreign obligations. The local currency gained against the US dollar from 50.552 last October to 50.384 in November.

But compared with the outdating debt in November 2020, the total amount jumped 17.7 percent year-on-year from P10.134 trillion.

Of the total debt stock, 70.7 percent were domestic borrowings, while 29.3 percent were sourced from externally sources.

In November, domestic debt amounted to P8.44 trillion, down 0.3 percent compared with the end-October 2021 level of P8.468 trillion.

Last month’s outstanding debt led to a year-to-date incremental increase of P1.75 trillion in local obligations. Year-on-year, it rose 17 percent from P7.191 trillion.

External debt, meanwhile, reached P3.49 trillion, 0.4 percent lower compared with P3.503 trillion in the previous month.

“The lower external debt for the month was attributed to Philippine peso appreciation against the US dollar and other foreign currencies adjustments amounting to P11.64 billion and P4.05 billion, respectively,” the treasury said.

“This more than offset the net availment of external obligations amounting to P2.90 billion,” the agency added.

From the start of the year, external debt has increased by P390.01 billion or 12.6 percent.

Meanwhile, the total national government guaranteed obligations decreased by P8.62 billion or two percent month-on-month to P417.84 billion in November.

The lower level of guaranteed debt was due to the net redemption of both domestic and external guarantees amounting to P4.94 billion and P3.49 billion, respectively.

Local currency appreciation also trimmed P770 million to offset the P580 million effect of net appreciation on third-currency denominated guarantees against the US dollar.