NG debt hits record P15.18 trillion

A Philippines peso note is seen in this picture illustration on June 2, 2017. — REUTERS

By Luisa Maria Jacinta C. Jocson, Reporter

THE National Government’s (NG) outstanding debt hit a fresh high of P15.18 trillion as of end-February, the Bureau of the Treasury (BTr) reported.

Data from the BTr on Wednesday showed that the NG’s debt portfolio rose by 2.63% from the P14.79 trillion recorded as of end-January.

“The NG’s debt stock increased by P388.51 billion or 2.63% month over month which was primarily attributed to domestic debt issuances, though partially tempered by the effect of the stronger peso on foreign debt valuation,” the BTr said in a statement.

Year on year, outstanding debt increased by 10.37% from P13.75 trillion in February 2023.

More than two-thirds or 69.68% of the NG’s debt came from domestic sources.

As of end-February, domestic debt went up by 4.08% to P10.58 trillion from P10.16 trillion in the previous month due to the net issuance of government securities.

It also jumped by 12.02% from P9.44 trillion in the same period a year ago.

“Meanwhile, peso appreciation trimmed P0.66 billion from domestic debt through downward revaluation of foreign currency denominated domestic debt,” the Treasury said.

Data from the BTr showed the peso finished at P56.174 versus the greenback at end-February, stronger than its P56.403 close at end-January.

Government securities made up almost the entire domestic debt in the first two months of 2024.

On the other hand, external debt dipped by 0.56% to P4.6 trillion from P4.63 trillion as of end-January.

“The decrease was attributed to favorable foreign exchange movements by both local and third currencies against the US dollar amounting to P18.79 billion and P9.96 billion, respectively. These more than offset the P2.75-billion net availment of foreign loans,” it said.

Year on year, foreign debt climbed by 6.76% from P4.31 trillion in the same two-month period in 2023.

Broken down, external debt was composed of P2.18 trillion in loans and P2.42 trillion in global bonds.

The NG’s guaranteed obligations edged lower by 1.07% to P344.93 billion as of end-February from P348.66 billion in the previous month.

Year on year, guaranteed obligations declined by 10.91% from P387.19 billion.

“The lower level of NG guarantees was due to the net repayment of external guarantees amounting to P3.23 billion as well as favorable foreign exchange movements by both local currencies and third currencies against the US dollar amounting to P0.69 billion and P1.1 billion, respectively,” the BTr said.

“Moreover, the net adjustment in domestic guarantees further offset P1.29 billion from the outstanding balance as of end-February 2024,” it added.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that the rise in outstanding debt was expected given the retail Treasury bond (RTB) issuance in February.

The Philippine government raised a record P584.86 billion from its offering of five-year RTBs in February, surpassing the P400-billion target set by the Treasury.

“The large maturities of government securities in March 2024, especially the P700-billion maturing RTBs, could potentially lead to some decrease in the outstanding NG debt by March,” Mr. Ricafort said.

“However, new global bond issuance for the coming weeks or as early as the second quarter of 2024 could add to the foreign debts and overall NG debt stock by then,” he added.

Finance Secretary Ralph G. Recto has said that the BTr is finalizing its first global bond issuance of the year but has yet to announce specific details of the offering.

The government’s borrowing program for this year is set at P2.46 trillion, with P1.85 trillion to be raised from the domestic market and P606.85 billion from foreign sources.

Latest data from the Budget department showed that the NG’s outstanding debt is projected to reach P15.84 trillion as of end-2024.