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October 07, 2022

NG debt climbs to over P12 trillion

More than P68 billion was added to the debt load of the National Government (NG) in February this year that resulted to the continued expansion of its total debt to P12.09 trillion.

The 0.5 percent expansion in NG debt was traced to fluctuations in the exchange rate of the peso versus the US dollar and to so-called net financing, essentially the cost of acquiring foreign and domestic financing versus the yield they bring to the nation’s coffers.

In this case, the cost of obtaining foreign and domestic funding during the period exceeded the yield they bring to NG.

According to the Bureau of Treasury (BTr), 30.4 percent of the financing obtained were from foreign sources and the bulk of 69.6 percent were from domestic creditors.

“NG domestic debt amounted to P8.41 trillion, which was P45.42 billion or 0.5 percent higher compared to the end-January 2022 level primarily due to net issuance of domestic government securities amounting to P44.89 billion. From the end-December 2021 level, outstanding domestic debt has increased by P242.79 billion or 3.0 percent.

“NG external debt of P3.68 trillion was P18.41 billion or 0.5 percent higher from the previous month. For February, the increment in external debt was due to the impact of peso depreciation against the US dollar amounting to P17.91 billion and the net availment of external obligations amounting to P3.25 billion. These more than offset the P2.74 billion reduction caused by adjustments in other foreign currencies,” the BTr said.

NG guaranteed debt fell by P6.31 billion or 1.5 percent to P416.20 billion in February versus the January level due to net repayment of both domestic and foreign guarantees amounting to P4.07 billion and P3.12 billion, respectively.

Third currency exchange rate fluctuation further lowered the peso value of external guarantees by some P250 million, offsetting the P1.12 billion effect of local currency depreciation against the US dollar, the BTr said..

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