Government debt load in March soared by more than half a trillion pesos in the month of March alone on the back of borrowing spree from domestic and foreign lenders, data from the Bureau of the Treasury revealed.
The gargantuan borrowing in March brought the national government debt stock to P12.679 trillion as of March 2022, an increase of 4.8 percent or P586.29 billion from P12.093 trillion in the previous month, the Treasury reported on Thursday, May 5.
Of the total debt stock, 69.9 percent were borrowed domestically while the remaining 30.1 percent were sourced from external sources.
According to the Treasury, the significant jump in total debt portfolio was primarily driven by higher borrowings, through the sale of government securities, to both local and foreign creditors.
Based on the Treasury data, the government heavily borrowed in the domestic market, incurring P455.45 billion in new debt during the month.
To recall, the Duterte administration borrowed P457.8 billion from small Filipino savers in March, through its retail treasury bond sale and debt exchange transaction.
Local debt amounted to P8.868 trillion, up 5.4 percent from P8.413 trillion in February.
Foreign debt, meanwhile, reached P3.811 trillion in March, higher by 130.84 billion or 3.5 percent compared with P3.68 trillion in February.
The Treasury said the increase was driven by additional overseas borrowings coupled with the depreciation of the peso against the US dollar.
The weaker local currency caused foreign debt to rise P37.31 billion, but it was tempered by adjustments in third currencies that trimmed P29.17 billion, the Treasury said.
Year-on-year, government debt accelerated by nearly P2 trillion, or 18 percent, from P10.773 trillion.
Amid increasing debt stock, Finance Secretary Carlos G. Dominguez III had said that President Duterte’s successor should avoid accumulating additional debt.
He noted that the debt problem incurred during the more than two-year Covid-19 crisis will be the biggest challenge for the next administration.
Dominguez pronouncement comes after the Department of Finance revealed that it would take up to 40 years to payoff all the additional foreign debt, amounting to at least P1.3 trillion, incurred by the Duterte administration since 2020.
“The biggest challenge for the next administration is really to grow out of the debt that we incurred during the pandemic,” Dominguez said last April 21.
During the pandemic, the government resorted to borrowings to cover the massive cost of Covid-19 response and the corresponding drop in revenues due to economic slowdown spawned by the global pandemic.
“The next administration will have to design policies and stick to very strict fiscal discipline to grow out of this debt problem,” he added.