Government debt reached P14.24 trillion in July this year, with a 10% increase compared to the same month last year.
Approximately 68.9% of the total debt originated from domestic sources, while the remaining 31.1% came from external creditors.
Debt as a percentage of GDP improved to 61% as of end-June 2023 from 62.1% a year ago.
Domestic government debt increased by 11% to P9.81 trillion in July compared to a year earlier.
oreign debt reached P4.43 trillion in July, marking a 9% increase from the same month in the previous year.
The impact of peso appreciation against the US dollar offset the increase in debt, amounting to P42.87 billion.
The average exchange rate between the US dollar and the Philippine peso in July was 54.834.
The Marcos administration expects the national government's total outstanding debt to climb to P15.842 trillion in 2024, an 8.3% increase from this year's program of P14.623 trillion.
Gov't debt surges to P14.24 trillion in July
At a glance
Government debt reached P14.24 trillion in July this year due to continued borrowing, but the peso's appreciation against the US dollar provided some relief, data from the Bureau of the Treasury showed.
The national government's outstanding debt increased by 10 percent in July from P12.89 trillion in the same month last year and showed a slight uptick of 0.7 percent compared to P14.15 trillion in the previous month, the Treasury said on Friday, Sept. 8.
Of the total, approximately 68.9 percent originated from domestic sources, while the remaining 31.1 percent was obtained from external creditors.
“Debt as a percentage of GDP [gross domestic product] improved to 61 percent as of end-June 2023 from 62.1 percent a year ago as economic conditions continue to recover from the impact of health and geopolitical events,” the Treasury said in a statement.
The debt-to-GDP ratio is crucial in assessing a country's debt situation. It compares how much the country owes to how much it produces, giving the public a better understanding of whether the debt is manageable or not.
Credit rating agencies generally recommend that countries, like the Philippines, maintain a debt-to-GDP ratio below 60 percent as it is considered manageable and sustainable.
In July, domestic government debt increased by 11 percent to P9.81 trillion from P8.83 trillion a year earlier. Month-on-month, the local financial obligations rose 1.1 percent from P9.7 trillion in June.
According to the Treasury, the increase in local debt was mainly due to the issuance of government bonds, which helped meet its financial needs.
The acceleration, however, was offset by the impact of local currency appreciation against the US dollar on foreign currency-denominated securities held domestically, the bureau added.
Meanwhile, foreign debt reached P4.43 trillion in July, marking a nine percent increase from P4.05 trillion in the same month of 2022.
The debt level, however, is slightly lower by 0.3 percent compared to the P4.44 trillion recorded in June this year.
The Treasury attributed the decrease to the impact of peso appreciation against the US dollar, which amounted to P42.87 billion.
“This more than offset the P9.97 billion net impact of third-currency fluctuations against the US dollar and P19.81 billion net availment of foreign loans,” the agency said.
The US dollar-Philippine peso had an average exchange rate of 54.834 in July, stronger than both the 55.322 recorded in the same month last year and the 55.368 from June.
In 2024, the Marcos administration expects the national government's total outstanding debt will climb to P15.842 trillion, representing an 8.3 percent increase from this year's program of P14.623 trillion.