NG debt down to P14.27 trillion in September

Philippine Tribune
Philippine Tribune

THE national government’s (NG) outstanding debt recorded a dip to P14.27 trillion as of end-September, the Bureau of the Treasury reported on Tuesday.

The figure is a decrease of P80.9 billion, or 0.6 percent lower than the debt tally a month earlier, the Treasury said in a statement, primarily due to the net repayments of both domestic and external obligations for the month.

As of end-September, outstanding debt was P849.81 billion higher from the start of 2023. Counted from September last year, meanwhile, the total increased by P751.57 trillion.

In percentage terms, debt declined by 0.6 percent from August but rose by 6.3 percent from end-December 2022 and 5.6 percent from a year earlier.

Domestic borrowings comprised the bulk, or 68.2 percent, of outstanding debt at P9.73 trillion.

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This was P56.77 billion (0.6 percent) lower compared to the end-August level, P525.97 billion up from end-December (5.7 percent) and P433.70 billion (4.7 percent) more than in September last year.

“Domestic debt issuance for the month totaled P121.1 billion while redemption amounted to P177.9 billion, resulting in a net repayment of P56.8 billion,” the Treasury said.

“Local currency depreciation against the US dollar had minimal effect on debt stock valuation at only P0.01 billion,” it added.

External debt — 31.8 percent of total outstanding debt as of end-September — totaled P4.53 trillion, 0.5 percent or P24.14 billion lower than the previous month.

The decrease was attributed to the favorable third currency fluctuations and net repayment of foreign loans.

“The outstanding external debt for September was reduced by P8.0 billion due to the net repayment of foreign loans and P16.9 billion from the depreciation of third currencies against the US dollar,” the Treasury said. “Meanwhile, peso depreciation against the US dollar added P0.7 billion.”

Compared to the end of December, external debt was P323.84 billion or 7.7 percent higher, while year on year, it was P317.87 billion or 7.5 percent higher.

Guaranteed obligations, meanwhile, decreased by 1.2 percent or P4.4 billion to P362.22 billion as of end-September 2023 from a month earlier.

The increase was said to be due to the net repayment of both domestic and external guarantees amounting to P1.6 billion and P1.4 billion, respectively.

“In addition, the value of third currency denominated guarantees went down by P1.3 billion, due to currency adjustments, offsetting the P0.03 billion additional debt caused by peso depreciation against the US dollar,” the Treasury said.

Guaranteed debt fell by 9.2 percent or P36.83 billion from the end of December 2022 and by 8.8 percent or P35 billion year on year.

Sought for comment, Rizal Commercial Banking Corp. chief economist Michael Ricafort said the decline was due to the net payment of national government debt amid relatively larger maturities of government debt that were paid off compared to recent months.

“However, for the coming months, especially in the fourth quarter of 2023 up to February 2024, relatively lower maturity of government debt and any continuation of budget deficits that need to be financed could lead to incremental borrowings that could lead to a new record high for the outstanding national government debt,” Ricafort warned.

“Tax and fiscal reform measures would help narrow the country’s budget deficit and also curb the increment in the outstanding national debt, going forward,” he added.

The Department of Budget and Management (DBM) expects the national government’s outstanding debt to reach an all-time high of P15.84 trillion by 2024.

Based on DBM data, debt will grow by 8.3 percent by the end of next year, progressing from the P14.62 trillion expected for this year.

The government projection includes settling the NG debt-to-gross domestic product ratio to 60 percent by the end of 2024, followed by a reduction to 51.5 percent by 2028.

It was at 61.0 percent as of end-June 2023.

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