End-June PHL debt soars to a record-high ₧12.79 trillion

FORMER President Duterte ended his term with the national government’s (NG) debt stock soaring to another record-high of P12.79 trillion as of end-June this year.

Latest data released by the Bureau of the Treasury on Friday showed the national government’s outstanding debt climbing by P296.06 billion or 2.4 percent from P12.496 trillion recorded by the end of the previous month, due to the net issuances of domestic and external loans and the peso depreciation versus the US dollar. 

Likewise, the debt stock surged by 14.6 percent from P11.17 trillion as of end-June last year.

Domestic debt, which cornered the bulk of the total, stood at P8.77 trillion, inching up by 1.2 percent from P8.67 trillion as of end-May this year. 

Driving the increase in domestic debt is the net issuance of government securities and the impact of the weakening of the peso versus the greenback. 

Foreign debt

Meanwhile, government’s foreign debt hit P4.02 trillion as of end-June, rising by 5.1 percent month-on-month from P3.83 trillion.  

The combined impact of local currency depreciation and the net availment of external financing had offset the effect of net depreciation against the US dollar on third-currency denominated obligations, the Treasury said. 

The peso depreciated against the greenback to P54.97 as of end-June from P52.412 as of end-May, according to the Treasury. 

By composition, commercial loans accounted for the bulk of external debt or 55.4 percent while multilateral and bilateral loans comprised 34.2 percent and 10.5 percent, respectively. 

Outstanding guaranteed debt of the national government as of end-June reached P413.93 billion, higher by P14.2 billion or 3.6 percent from P399.72 billion by the end of May, owing to the net availment of domestic guarantees on top of the weakening of the peso. 

By the end of this year, the government expects the country’s outstanding debt to soar to P13.42 trillion.

The national government’s debt-to-GDP ratio as of the first quarter of the year rose to 63.5 percent, above the internationally recommended 60-percent threshold by multilateral lenders for emerging markets like the Philippines. It is also the highest since the country’s debt-to-GDP ratio hit 65.7 percent in 2005 under the Arroyo administration.

Finance Secretary-designate Benjamin Diokno earlier vowed to keep the country’s debt-to-GDP ratio within the “sustainable threshold” and to continue the government’s heavy reliance on domestic borrowings while balancing the need to sustain the country’s economic recovery. 

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