The Bureau of the Treasury reported on Wednesday, May 31, that the national government’s debt stock continued to rise nearing P14 trillion in April this year due to additional borrowings and a stronger US dollar.

As of end-April 2023, the outstanding debt of the government increased nine percent to P13.911 trillion from P12.763 trillion in the same month last year. The amount also inched up by 0.4 percent compared with P13.856 trillion last March.

Of the total debt, 68 percent was domestically borrowed, while the remaining 32 percent was sourced from overseas lenders.

“[The increase] was due to the net issuance of external debt and local currency depreciation against the US dollar,” the Treasury bureau said in a statement.

Domestic debt amounted to P9.458 trillion as of April, up six percent compared with P8.935 trillion a year ago. Month-on-month, debt slightly declined by 0.6 percent from P9.513 trillion in March.

The Treasury said the drop was driven by the net redemption of domestic securities amounting to P57.79 billion during the month.

However, the Treasury said, “This was slightly offset by the P2.47 billion effect on onshore foreign currency-denominated securities caused by peso depreciation against the US dollar.”

Overseas debt, on the other hand, accelerated to P4.453 trillion at end-April 2023, jumping 16 percent year-on-year from P3.827 trillion. Moreover, it rose 2.5 percent from P4.343 trillion in March.

“For April, the increment to external debt was due to the P27.98 billion net availment of external loans and P94.28 billion impact of local-currency depreciation against the US dollar,” the Treasury said.

Despite the increasing debt stock in nominal terms, Finance Secretary Benjamin E. Diokno said the government’s outstanding loan obligations as a share of the country’s economy were on a downward trend.

The quarterly debt-to-gross domestic product (GDP) ratio stood at 61.0 percent as of end-March 2023, down 2.5 percentage points from 63.5 percent last year.

However, the end-March debt ratio is still above the 60 percent international threshold deemed by debt watchers as manageable among emerging markets like the Philippines.

This ratio is also a measure used by many debt watchers to assess the creditworthiness of governments.

The national government debt as a proportion of GDP had ballooned after the previous Duterte administration acquired substantial new debt during the coronavirus pandemic.

“The government is committed to a fiscal consolidation path and will continue the implementation of the government’s infrastructure development program of 5 to 6 percent of GDP annually as indicated in the Medium-Term Fiscal Framework (MTFF),” Diokno said.

The MTFF aims to bring down the debt-to-GDP ratio to less than 60 percent by 2025 then further down to 51.1 percent in 2028.