Philippines debt level nears P17 trillion mark

MANILA, Philippines, July 4 ------ The country’s outstanding debt reached a new high and inched closer to P17 trillion as of May following the issuance of new domestic securities, the Bureau of the Treasury said. Latest data from the Treasury showed that the national debt settled at P16.92 trillion as of end-May, the highest level to date. The amount is also 10.24 percent higher than the P15.35 trillion debt during the same period last year.

For May alone, the government added some P166.2 billion to the debt pile, up by almost a percentage month-on-month. According to the Treasury, the minimal increase in debt in May was offset by the appreciation of the peso, thereby reducing the effect of additional borrowings in line with the fiscal program. Nonetheless, the outstanding debt is already 97.5 percent of the 2025 debt expectation of a record P17.35 trillion.

Domestic borrowings accounted for the bulk or 69.6 percent of the debt pile while the remaining 30.4 percent came from external sources. The Treasury said the present mix is a reflection of the government’s bias for domestically sourced financing, helping mitigate foreign exchange risks and strengthen the local capital market. “The government remains committed to its prudent debt management strategy, ensuring borrowings are strategically aligned with fiscal objectives and overall macroeconomic stability,” the Treasury said.

Data showed that total domestic debt at P11.78 trillion slightly went up by 1.64 percent on a monthly basis and jumped by 12.8 percent from the P10.44 trillion in the same period last year. The increase was due to the P190.87 billion in net domestic financing, reflecting sustained investor confidence in the economy.

The peso’s appreciation likewise contributed to a P910-million reduction in the overall domestic debt valuation, helping temper the increase. External obligations, on the other hand, slipped by 0.46 percent to P5.14 trillion month-on-month. It grew by five percent from P4.9 trillion on a yearly basis.

The Treasury said the reduction is attributed to the P29.35-billion decrease in the peso equivalent of dollar-denominated debt behind local currency appreciation. There was also a net repayment of external loans at P3.55 billion. These were partly offset by a P9.14-billion revaluation resulting from third-currency fluctuations against the dollar. Meanwhile, the government’s guaranteed obligations went up to P343.58 billion, driven by the net availments of domestic guarantees totaling P6.53 billion, along with a P530-million third-currency revaluation.

Source: philstar.com