📷Francisco Colayco
The government debt increased year-on-year by 7.95 percent as of end-April on the back of depreciating Philippine peso and the country’s net financing.
Data released by the Bureau of the Treasury on Thursday showed that the national government’s outstanding debt surged to P15.017 trillion as of April 2024 from P13.911 trillion during the same month last year.
The country’s debt also picked up by 0.61 percent or by P91.50 billion month-on-month from P14.925 trillion as of end-March.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., attributed the increase in the government debt to the new borrowings and lower amount of debt maturities in April 2024.
“Geopolitical risks in April 2024 due to the Israel-Iran conflict could have led to some hedging of (national government) borrowings as a matter of prudence,” Ricafort told The City Post in a Viber message.
“For the coming months, outstanding NG debt could increase further after the US$2 billion NG global/bond issuance in early May 2024 out of the US$5 billion programmed for the year,” Ricafort added.
Based on Treasury data, domestic borrowings accounted for the majority or 68.64 percent of the debt pile, while the remaining 31.36 percent came from external sources.
Total domestic debt stood at P10.31 trillion as of end-April, 0.30 percent or P31.01 billion higher from P10.277 trillion as of March. It also increased by 8.99 percent or PP850.66 billion from the P9.457 trillion in April 2023.
For the month, the increment resulted from the P27.23 billion net issuance of government securities and the P3.78 billion effect of peso depreciation on foreign-currency-denominated domestic debt.
External obligations, on the other hand, slightly went up by 1.30 percent to P4.71 trillion trillion month-on-month. It rose 5.74 percent or P255.42 billion from P4.453 trillion on a yearly basis.
“Although there was a net repayment of P32.91 billion in foreign loans within the month, the considerable depreciation of the peso caused a P109.31 billion upward adjustment in the local valuation of US dollar-denominated debt, partly offset by the P15.91 billion downward adjustment brought about by the opposite movement of third- currency debt,” the Treasury said. (TCSP)
