Outstanding debt dips to P6.8T in May

Net repayments trimmed the national government’s outstanding debt to P6.832 trillion last month, the Bureau of the Treasury reported on Friday.

“The national government’s (NG) outstanding debt stood at P6,832.57 billion as of end-May 2018, P42.14 billion or 0.6 percent lower than the previous month due to net redemptions/repayments on both domestic and external debt,” the Treasury said in a statement.

Domestic borrowings accounted for the bulk or P4.424 trillion, 1.7 percent lower from April, while external debt rose by 1.4 percent to P2.408 trillion.

Outstanding debt a year earlier was P6.345 trillion with domestic and foreign obligations at P4.137 trillion and P2.207 trillion, respectively.

The Treasury said the drop in domestic debt was due to the net redemption of government securities amounting to P74.93-billion, which was “slightly tempered” by the P410-million impact of a weaker peso.

The peso, it noted, depreciated to P52.55 against the dollar as of end-May from April’s P51.73:$1. The exchange rate a year earlier was P49.76:$1.

The currency’s fall, which increased the peso value of foreign exchange debt by P37.66 billion, was also responsible for the rise in external debt, the Treasury said.

This was slightly trimmed by net repayments on external loans amounting to P4.89 billion and the impact of net depreciation on third currency-denominated debt amounting to P390 million, it added.

Commenting on the latest figures, Land Bank of the Philippines market economist Guian Angelo Dumalagan said: “The decline in government debt is a good thing as it gives the government more flexibility to expand it’s borrowings in the future to fund the administration’s aggressive infrastructure spending.”

Government-guaranteed debt, meanwhile, dropped by P2.149 billion or 0.4 percent to P492.296 billion from April. It was down 0.3 percent from May last year.

The month-on-month decrease, the bureau said, was due to net redemption on domestic guarantees amounting to P8.37 billion.

This outpaced net availments on external guarantees totaling P0.46 billion and foreign exchange fluctuations on both dollar and third-currency denominated guarantees amounting to P4.61 billion and P1.15 billion, respectively.

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