Consolidated public sector debt hits P7.7T

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The country’s consolidated public sector debt (CPSD) reached P7.7 trillion in the first quarter of the year, the Department of Finance (DOF) reported on Thursday.

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The DOF noted that end-March CPSD was equivalent to 71.3 percent of the country’s gross domestic product (GDP), lower compared to the 74.3 percent of GDP as of the same period last year.

However, the P7.7-trillion CPSD recorded an increase of 2 percent, equivalent to P154.2 billion from the end-2012 debt of P7.5 trillion.

The Finance department added that total domestic debt of the public sector rose by 5.3 percent to P5.5 trillion while foreign debt eased by 5.4 percent to P2.1 trillion.

The CPSD represents the total debt of the national government, local governments, the 14 monitored government corporations (mnfgcs), the country’s social security institutions, the Bangko Sentral ng Pilipinas (BSP), and the three government financial institutions (gfis), net of the government’s holdings of its own debt through the above-mentioned institutions and the Bond Sinking Fund (BSF).

Meanwhile, general government debt, which counts national government debt net of the government’s holdings of its own debt, was down 3.1 percent from the December 2012 level.

The ratio of general government debt to GDP declined to 38.5 percent from 40.6 percent as of the end of 2012.

In a statement, Finance Undersecretary and chief economist Gil Beltran said that the latest figures was the result of an intelligent borrowing program.

“The benefits of our liability management program have allowed us to notch general government debt at only 38.9 percent of GDP. We already scored more favorably on this metric than many other economies rated higher than us and we were able to drive this down further,” he said.

Beltran also mentioned that the Philippine general government ratio is now lower than the Association of Southeast Asian Nations plus China, Japan and Korea average of 39.4 percent.

On the other hand, nonfinancial public sector debt declined by 2.7 percent to P5.4 trillion, equivalent to 50.4 percent of GDP.

The DOF attributed the lower debt to the P155.6-billion decrease in national government debt, lower debt of local governments, and also the decrease in both the domestic and foreign liabilities of the 14 MNFGCs.

The outstanding debt of the financial public corporations grew by 5.4 percent to a level of P3.9 trillion.

BSP debt registered an increase of 6.7 percent offset by a decline of 21.3 percent in the debt of the GFIs from December 2012 level.

As of March 2013, 28 percent of total outstanding public sector debt was owed to foreign creditors and the remaining 72 percent was owed to domestic creditors.

Mayvelin U. Caraballo

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