The national government ended 2016 with a P6.09 trillion debt, up 2.3 percent from a year earlier, with the dollar component boosted by the peso’s weakness during the period, the Bureau of the Treasury (BTr) said.
An analyst forecast that a weak peso could raise the level of national government’s debt further going forward.
Data released by the BTr on Friday showed the national government’s outstanding debt as of end-December climbed from P5.95 trillion at end-2015.
Month-on-month, the liabilities in December were lower by P14.77 billion or 0.24 percent from the end-November level, it said, tracing the decline to currency fluctuations as well as net repayment on domestic securities.
The proportion of the debt amount to the Philippines’ gross domestic product, or debt-to-GDP ratio, however, fell.
“Despite the increase in nominal debt, the debt-to-GDP ratio continued its downward trend at 42.1 percent from 44.7 percent a year ago. The lower debt-to-GDP ratio, a usual measure of sustainability, is due to the moderate increment in debt as a result of prudent cash and debt management, lower deficit and steady economic growth,” the BTr said.
Showing a breakdown of the figures, the BTr said foreign borrowings as of end-November stood at P2.15 trillion, 4.2 percent higher than the year-earlier level and down 0.4 percent or P9.61 billion from the end-November level “due to the impact of third currency depreciation against the US dollar, amounting to P9.28 billion and net repayment of P1.30 billion counteracting the P0.96 billion effect of the peso weakening against the US dollar.”
External debt priced up at P49.76
The external debt at end-December was priced at P49.76 to a dollar compared with P47.15 a year earlier and P49.74 as of end-November.
The national government’s domestic debt rose by 1.3 percent year-on-year to P3.93 trillion and was down 0.1 percent from end-November due to net repayments.
Market economist Guian Angelo Dumalagan of the Land Bank of the Philippines said the depreciation of the peso in 2016 made foreign debt more expensive in peso terms, contributing to the increase in total outstanding debt in local currency units.
“This year, the peso’s weakness might still exert the same influence on foreign debt… With the Duterte administration’s plan to expand infrastructure spending this year, total government debt is expected to rise further,” he said.
Meanwhile, debt guaranteed by the national government decreased by 5.8 percent percent to P513 billion from P545 billion a year earlier. Month-on-month, government-guaranteed debt decreased by P18 billion or 3.5 percent
“These reversed the effect of the peso depreciation that raised the peso value of guarantees by P0.13 billion,” the BTr said.