Govt debt up 8.3% at P6.37T in April

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NATIONAL government debt rose by 8.3 percent to P6.37 trillion in April from a year earlier on higher domestic and foreign obligations, which the Bureau of the Treasury (BTr) traced to new retail treasury bonds and revaluation in third currency-denominated debt.

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Domestic debt increased by 10.4 percent year-on-year to P4.16 trillion and was up 4.8 percent from March, BTr data showed Monday.

“Domestic debt levels were driven by the net issuance of government securities amounting to P192.48 billion, including P181 billion in 3-year Retail Treasury Bonds (RTB),” it said.

A stronger peso tempered the increase, which reduced the valuation of onshore dollar bonds, according to the BTr.

The bureau said the peso was firmer at P49.90:$1 in April from P50.21 in March.

National government debt levels may further increase in the months ahead as government speeds up social and infrastructure programs, an analyst noted.

“In the President’s SONA last July, the target NG debt was penciled in at P631 billion. The first four months, if my extrapolated figures are correct, is fast approaching the mid-point of the target,” Philstocks.ph senior research analyst Justino Calaycay Jr.

President Rodrigo Duterte delivered his first State of the Nation Address (SONA) on July 25, 2016.
Calaycay noted the need to fast-track congressional approval of the tax reform bill.

“While current levels are still not worrisome, it must be managed and monitored closely in reference to the targets set earlier and should not compromise the over-all fiscal position. Already, the government has pegged a higher budget deficit to support its agenda,” he said.

On program, the Duterte administration targets a deficit spending equivalent to 3 percent of gross domestic product.

Foreign borrowings stood at P2.21 trillion last month, up 4.5 percent from a year earlier but down 0.5 percent
from March.

“Factors causing external debt to slightly increase for the period include the revaluation in 3rd currency-denominated debt worth P0.32 billion and net availments amounting to P2.01 billion,” the BTr said.

But these were dwarfed by the impact of a stronger peso which reduced the value of external obligations by P14.11 billion, it said.

External debt was priced at P49.90 to a dollar from P46.88 a year earlier and P50.21 in March.

Debts guaranteed by the national government was down 12.3 percent at P495.08 billion from P564.48 billion year-on-year. Month-on-month, government-guaranteed debt decreased by P21.71 billion or 4.2 percent.
“The reduction was principally due to net repayments of domestic guarantees amounting to P19.33 billion alongside the P2.26 billion effect of peso appreciation and third currency revaluation on foreign guarantees,” the bureau said.

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