The Philippine government’s outstanding debt in May rose slightly from April and a year earlier despite the peso showing strength during the month, pushed by higher foreign borrowings, data from the Bureau of the Treasury (BTr) showed on Thursday.
The government’s total debt in May amounted to P5.885 trillion, 0.03 percent higher month-on-month from April’s P5.883 trillion, and 2.3 percent higher than the P5.75 trillion in May 2015.
The Btr data showed that the peso appreciated from P46.88 as of the beginning of April to P46.72 in the beginning of May this year.
The government’s outstanding debt during May was composed of 64.5 percent local borrowing and 35.4 percent foreign external debt.
Higher foreign debts
In terms of external debt or borrowings from foreign accounts abroad, the government amassed P2.08 trillion in debt, a 7.9 percent jump from P1.93 trillion in the same month in 2015, but 1.2 percent lower from P2.11 trillion in April.
“Borrowings in foreign currency may have been undertaken given that fiscal managers may have judged that the window to borrow in foreign currency was narrowing with the then pending interest rate hike by the Fed,” Nicholas Mapa, associate economist at the Bank of the Philippine Islands, said.
“Of course, Brexit happened and now the Fed rate hike is in question so the window may be open for a little longer,” he added.
The state’s domestic debt—or debt in local currency from Filipino residents, firms and organizations—in May totaled P3.79 trillion, 0.55 percent less than the P3.81 trillion in May 2015, and 0.75 percent lower than the P3.76 trillion in April.
On the other hand, borrowings guaranteed by the national government in May went up by 12.2 percent to P448 billion from P399 billion in the same month last year. This also increased by 12.8 percent compared to the P458 billion in April.