Govt debt soars to nearly P8T in May
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Wed, 03 Jul 2019 16:25:07 +0000
THE national government’s outstanding debt surged to a record P7.915 trillion in May due to the net issuances of both domestic and foreign loans and foreign-exchange fluctuations, the Bureau of the Treasury (BTr) reported on Wednesday.
In a statement, the Treasury bureau said the amount was a 1.7-percent or P128.717-billion increase from April’s P7.786 trillion.
“Of the total stock, 33.6 percent were sourced from external markets, while 66.4 percent were borrowed domestically,” it added.
Domestic borrowings totaling P5.526 trillion — up 1 percent from the April figure — accounted for the bulk of outstanding debt, while external debt rose by 3 percent to P2.659 trillion.
Outstanding debt the year before stood at P6.832 trillion, with domestic and foreign obligations at P4.424 trillion and P2.408 trillion, respectively.
The higher domestic debt level in May “was caused by [the] net issuance of government securities amounting to P50.95 billion, which added to the P0.06-billion revaluation of onshore dollar bonds due to [the] peso depreciation,” the Treasury explained.
A foreign exchange rate of P52.222 against the dollar was used for the latest data, compared with April’s P52.098:$1. The exchange rate used a year earlier was P52.554:$1.
The increase in foreign debt for the month was blamed on the effect of currency fluctuations of both US dollar and third-currency denominated debt amounting to P6.14 billion and P10.09 billion, respectively.
“At the same time, net availment of foreign loans amounted to P61.48 billion, including 750 million euro in euro bonds as part of the NGs (national government’s) effort to diversify funding sources for infrastructure investment and human capital development,” the BTr said.
The eight-year tenor euro bond offered in May was priced 0.875 percent and yielded 70 basis points over the benchmark because of the good reception from high-quality and real-money investors, especially from Europe.
This, despite the lower-than-expected Philippine economic growth of 5.6 percent in the first quarter and ongoing trade tensions between US and China that saw them imposing tit-for-tat tariffs worth billions of dollars on each others’ goods, as well as Washington effectively blacklisting Chinese technology giant Huawei Technologies Co. Ltd., which it deems a threat to national security and accuses of spying for Beijing.
Government-guaranteed debt, meanwhile, climbed by P3.176 billion or 0.7 percent to P486.158 billion in May, but down 1.2 percent from the year-ago figure.
The month-on-month increase, the Treasury said, was “due to the net issuance of domestic guarantees amounting to P49.72 billion and the impact of net appreciation of both USD and third-currency denominated guarantees amounting to P0.68 billion and P3.68 billion, respectively.”
“However, this was tempered by the net repayment of foreign guarantees amounting to P50.85 billion,” it added.
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