Weaker peso tagged as NG debt hits P6.5T

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The national government’s outstanding debt rose to P6.5 trillion as of the end of October, nearly P60 billion more than the previous month, following the peso’s continued depreciation against the dollar.

Domestic borrowings accounted for the bulk or P4.22 trillion with the remaining P2.28 trillion owed to foreign creditors, the Bureau of the Treasury reported on Wednesday.

Outstanding debt a year earlier was P6.06 trillion with domestic debt at P3.91 trillion and foreign obligations totaling P2.15 trillion, Treasury data showed, for respective year-on-year increases of 7.6 percent and 6.2 percent.

Reckoned from September, domestic and external debt increased by 0.7 percent and 1.3 percent, respectively.
Of the P57.2 billion added to the previous month’s outstanding debt level of P6.44 trillion, over half or P29.62 billion was due to foreign debt. The actual increase was P37.98 billion, which was offset by net repayments of P1.67 billion and third currency depreciation against the dollar amounting to P6.69 billion.

The peso, the Treasury noted, fell to P51.686 to the dollar as of end-October from September’s P50.83:$1. The exchange rate a year earlier was P48.48:$1.

Domestic debt increased by P27.57 billion month-on-month, mostly due to the net issuance of government bonds totaling P27.15 billion and the P420-million impact of currency adjustments on onshore dollar bonds.
Government-guaranteed debt, meanwhile, increased by P24 million or 0.005 percent to P489.09 billion from September’s P489.06 billion. It was down 12.8 percent from the P560.65 trillion recorded in October last year.

The month-on-month result, the Treasury said, was due to the “combined effect of net repayments on both domestic and external guarantees amounting to P2.73 billion and P0.24 billion, respectively, and the impact of third currency depreciation on government guarantees amounting to P1.86 billion tempering the P4.83-billion effect of peso depreciation.”

Reckoned from the end of last year, national government guarantees were down by P24.59 billion or 4.8 percent.
The Treasury said that as of the end of the third quarter, the national government debt ratio was at 41.7 percent of gross domestic product.

“This continues the downward trajectory for the year after the slight increase to 42.4 percent as of Q2 2017 from the end 2016 leverl of 42.1 percent,” it said.





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