Weaker peso raises gov’t debt to record high P6.417T at end-June 2017

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As the peso slid to almost 11-year lows in June, the national government’s outstanding debt inched up to a record high P6.417 trillion at the end of the first six months of 2017.

The latest Bureau of the Treasury data released Wednesday showed that outstanding liabilities as of end-June rose 1.1 percent from P6.345 trillion last May and 7.9 percent from P5.948 trillion in June last year.

End-June domestic debt, which accounted for nearly two-thirds of the total, increased 1.2 percent to P4.186 trillion from P4.137 trillion a month ago “primarily due to the net issuance of government securities amounting to P48.72 billion and peso depreciation that increased the value of onshore dollar bonds by P340 million,” the Treasury said.

The Treasury noted that the peso weakened to 50.449:$1 at end-June from 49.761:$1 in May.

On a year-on-year basis, domestic obligations jumped 9.3 percent from P3.828 trillion during the first half of last year.

As for external debt, these increased by 1 percent to P2.231 trillion from end-May’s P2.208 trillion.

The Treasury attributed the month-on-month increase in foreign debt “largely to the impact of peso depreciation against the US dollar amounting to P30.53 billion.”

The impact of the weaker peso “more than offset the upward revaluation of third currency-denominated debt amounting to P5.13 billion and net repayments worth P2.49 billion” in June, the Treasury added.

Compared with a year ago, the end-June external debt climbed 5.2 percent from last year’s P2.119 trillion.

As for the national government’s outstanding guaranteed debt, these slightly declined by 0.1 percent month-on-month to P493.18 billion at the end of the first semester.

“The reduction was principally due to net repayments on both external and domestic guarantees amounting to P1.05 billion and P1.78 billion, respectively, alongside the P1.58 billion effect of third currency revaluation. These more than offset the P3.97-billion effect of the weaker peso,” the Treasury explained.

The guaranteed obligations also dropped by a faster 12.4 percent from P563.29 billion in 2016. /atm

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