Gov’t debt drops to P12.5 T in May

Published July 1, 2022, 5:38 PM

by Lee C. Chipongian

National Government (NG) debt declined to P12.49 trillion as of end-May, down by 2.1 percent or by P267.41 billion month-on-month from April’s P12.76 trillion, based on treasury data.

The Bureau of the Treasury (BTr) said on Friday, July 1, that NG debt improved in May versus April “primarily due to the repayment of provisional advances from the BSP.”

Bank teller counting P1,000 bills/Bloomberg photo

This was the P300 billion provisional advances to the BSP that the Department of Finance (DOF) paid in advance in May, well ahead of its June 11 maturity date since former DOF Secretary Carlos Dominguez III wanted to settle all pandemic-related liquidity support from the BSP before the Marcos administration begins.

About 30.7 percent of the P12.49-trillion debt was borrowed from external sources while bulk or 69.3 percent were from domestic sources.

NG external debt has increased by P272.19 billion or 7.6 percent from the end-December 2021 level.

Based on BTr data, domestic debt totaled P8.67 trillion, three percent or P270.40 billion lower year-on-year, after the NG repaid BSP. As of end-May, outstanding domestic debt has increased by P495.04 billion or 6.1 percent.

External debt, meanwhile, stood at P3.83 trillion, up by one percent or by P2.99 billion.

“For May, the increment in external debt was attributed to the impact of local and foreign currency fluctuations against the USD (US dollar) amounting to an additional P5.63 billion and P9.41 billion, respectively,” said the BTr. “These more than offset the effects of net repayment of external obligations amounting to P12.05 billion,” it added.

The BTr also reported that total NG guaranteed obligations dropped to P399.71 billion or 3.3 percent lower month-over-month. It said the reduction was due to the net repayment of both domestic and external guarantees of P8.41 billion and P6.48 billion, respectively.

BTr added that these net repayments more than offset the impact of the weak peso to P0.32 billion and the net appreciation of third-currency denominated guarantees against the greenback amounting to P0.85 billion.

 
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