PH debt swelled to record

P6.82T
@Philippine Daily Inquirer / 05:30 AM March 29, 2018

The national government’s debt stock further swelled to another record-high P6.82 trillion in
February partly as the peso further weakened against the dollar that month.

The latest Bureau of the Treasury data released Wednesday showed that the government’s
outstanding obligations inched up by 1.4 percent from January’s P6.73 trillion as well as
increased by a faster 9.9 percent from P6.21 trillion in February last year.

As the government still relies heavily on borrowing from local sources mainly through the sale
of treasury bills and bonds amid relatively lower yields, the share of domestic debt to the end-
February total remained bigger at 64.9 percent.

Domestic obligations declined by 0.02 percent month-on-month to P4.43 trillion “due to the
net redemption of government securities amounting to P1.28 billion, which were partially
tempered by peso depreciation that increased the value of onshore dollar bonds by P360
million,” the Treasury explained in a statement.

The peso depreciated to 52.07:$1 at end-February from 51.341 to the greenback in January, the
Treasury noted.

The weaker peso had been mostly blamed on market concerns on the current-account deficit,
which the Bangko Sentral ng Pilipinas reported last month swelled to $2.5 billion in 2017, the
biggest since 1999.

Year-on-year, however, local debt jumped 11.2 percent from P3.98 trillion in February last
year.

A similar 11.2-percent year-on-year climb in outstanding government securities to P4.43

trillion was posted as of February.
The Treasury has been raising its domestic borrowing program during the recent past quarters
to fund the growing national budget as well as finance the Duterte administration’s ambitious
“Build, Build, Build” infrastructure program.

For instance, during its first 18 months in office, the Duterte administration already embarked
on three retail treasury bond (RTB) issuances not only to cater to small investors but also to
raise money for massive infrastructure projects, which would be mostly financed by the
budget.

This week, the Treasury announced that it had programmed to sell P325 billion in government
securities from April to June, a bigger volume than the first-quarter domestic borrowing
program of P240 billion, with smaller weekly offerings to make them more appealing to

As for the national government’s foreign debt, these grew 4.2 percent month-on-month and 7.6
percent year-on-year to P2.39 trillion at end-February.

“The growth in external debt was driven by net availments on foreign loans and bond issuance
as well as forex fluctuations. The peso depreciation and third-currency appreciation raised the
value of the US dollar and third-currency denominated debt by P32.59 billion and P4.76
billion, respectively,” the Treasury said.