Gov’t debt stock reaches P13.6 trillion

Published December 7, 2022, 3:59 PM

by Chino S. Leyco

Government debt stock rose anew in October this year due to new loans and weakening peso, data from the Bureau of the Treasury revealed.

As of October 2022, the national government’s outstanding debt stood at P13.641 trillion, up 14 percent compared with P11.971 trillion in the same period last year.

Month-on-month, total debt inched up by 0.92 percent from P13.517 trillion. Since end-December last year, it has already risen by P1.91 trillion or 16.31 percent.

At end-October, domestic debt amounted to P9.36 trillion, 0.59 percent higher compared with P9.3 trillion in September. The increase was primarily due to the net issuance of government securities.

Local debt comprises 68.58 percent of the total debt stock, which has increased by 14.5 percent since the beginning of the year due to continued preference for domestic financing to mitigate foreign currency risk.

Meanwhile, foreign debt rose 1.64 percent to P4.28 trillion from P4.216 trillion in the previous month.

According to the Treasury, the increase was due to the P118.71 billion net availment of foreign financing.

Year-to-date, external debt has increased by 20.45 percent owing to local- and third-currency fluctuations that increase the peso value of foreign denominated obligations.

The peso average 58.047 against the greenback in October, down from 50.552 in the previous year.

As of September 2022, the outstanding obligations of the national government as a share of gross domestic product (GDP) hit 63.7 percent, up 1.6 percentage points from 62.1 percent in June.

It is also rose from 63.5 percent in March and 60.4 percent in 2021.

Based on the Treasury data, the latest quarterly debt-to-GDP figure was the highest since 65.7 percent in 2005.

The end-September debt ratio is above the 60 percent international threshold deemed by debt watchers as manageable among emerging markets like the Philippines.

An elevated debt-to-GDP level puts the country’s investment-grade status at risk.