Govt April debt rises on weaker peso

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Currency depreciation adds more than P70B to govt obligations

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The Philippine government’s outstanding debt rose in April from a year earlier as the weak peso boosted the value of the dollar and other currency-denominated obligations, Bureau of the Treasury (BTr) data showed on Wednesday.

Data obtained from BTr website showed government’s total debt in April amounted to P5.88 trillion, 1.6 percent higher than the P5.79 trillion in April 2015.

April total government debt was 0.3 percent lower month-on-month from March 2016’s P5.89 trillion.

Revaluations due to peso depreciation, however, accounted for P70.48 billion of the increase in debt across the various debt categories, according to the BTr data.

The government’s outstanding debt during April was composed of 64 percent local borrowing and 35.9 percent foreign external debt.
Domestic debt lower

The state’s domestic debt—or debt in local currency from Filipino residents, firms and organizations—in April totaled P3.76 trillion, 2.1 percent less than the P3.85 trillion in April 2015, and 1.9 percent lower than the P3.84 trillion in March.

“The reduction in domestic obligations reflects the net redemption of government securities amounting to P72.30 billion, offsetting the P0.35 billion effect of peso depreciation against the USD on the value of multi-currency denominated debt,” the bureau explained.

It noted that the peso depreciated from P45.98 as of the beginning of March to P46.88 in the beginning of April this year.

Year-to-date, the level of domestic debt has decreased by 3 percent or P115.07 billion.

Upward revaluations

In terms of external debt or borrowings from foreign accounts abroad, the government has amassed P2.11 trillion debt, which is a 9 percent jump from P1.93 trillion in the same month in 2015 and 2.7 percent higher from P2.05 trillion in March 2016.

“The increase in external obligations was due to the weaker peso against the dollar and 3rd currencies which caused an upward revaluation of P40.18 billion and P16.18 billion, respectively,” the BTr said.

It noted that net availments, on the other hand, added P140 million to total external obligations, it added.

The external debt portfolio has increased by 2.1 percent or P44.20 billion since the start of 2016.

Borrowings guaranteed by the national government in April went up by 14 percent to P458 billion from P401 billion in the same month last year. This also increased by 3.5 percent compared to the P442 billion in March.

“The increase in guaranteed obligations was due to the combined effect of peso depreciation against the dollar and third currencies which raised the peso value of debt by P13.77 billion, net drawdowns on domestic guarantees from credit lines with LBP [Land Bank of the Philippines] and DBP [Development Bank of the Philippines] amounting to P1.19 billion, and net availments of external guarantees amounting to P0.32 billion,” it said.

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