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By Chino S. Leyco, Reporter
THE Philippine government’s outstanding debt
dipped year on year at end-March due to the peso’s appreciation
against the dollar, according to the Bureau of Treasury.
Data from the bureau showed that first-quarter
obligations stood at P3.881 trillion, or 1.3-percent lower than the
P3.931-trillion outstanding in the same three-month period last
year.
Of the total debt outstanding, P2.286 trillion
was owed to domestic creditors, while the remaining P1.594 trillion
was due to foreigners.
The government’s foreign debt dropped 9.1
percent year-on-year due to the peso’s strength vis-à-vis the
dollar.
The domestic component of its obligations,
however, rose 5 percent from last year, as the government borrowed
5.1-percent more this year through the issuance of Treasury bills
and bonds.
Compared with the end-February levels, the
first-quarter borrowings, however, inched up 2.9 percent, driven by
a 4.9-percent increase in foreign obligations. The Treasury bureau
blamed the rise on a weaker peso in March compared with the February
exchange rate, citing the P27-billion net depreciation of third
currencies against the dollar, and the P49-billion dip in the
peso’s value vis-à-vis the greenback.
“This was partially offset by the P2 billion
in net repayments,” the bureau said.
Domestic debt at end-March, however, rose at a
slower 1.6 percent from the previous month.
The government’s contingent debt—composed
mainly of guarantees issued by the government—increased 4.9
percent from end-February largely on account of higher guarantees on
foreign-denominated debt. The national government’s direct
guarantees rose 5.8 percent month-on-month.
Compared with a year ago, the end-March
contingent liabilities slipped 6.7 percent, as direct national
government guarantees on foreign loans fell 7.9 percent.
One-year T-bill rate slides
At Tuesday’s auction of the one-year T-bill,
the rate fell to 6.79 percent from 6.846 percent in the previous
auction, after last week’s 25-basis points increase in the Bangko
Sentral ng Pilipinas’ (BSP) key borrowing rates.
The bureau borrowed P6 billion, even though
bidders were willing to lend as much as P14.479 billion.
Finance Undersecretary Gil S. Beltran said the
government was expecting banks to bid for higher returns after local
share prices closed down 3.4 percent amid soaring oil prices and
weakness across Asia’s stock markets.
“The stock market went down, so this one
should go up but it did not. So the only explanation is that they
are just re-pricing based on last week’s expectations that there
will be an increase of 50 basis points,” Beltran told reporters
referring to the BSP’s monetary decision.
“They are buying now for clients, not for
their own investment—it’s client-driven. The financial market is
in turmoil, decline in China is about 6 percent, ours is 3.4
percent. We can survive these things, our economy is stronger than
before,” he added.
With the increase in its overnight borrowing and
lending rates to 5.25 percent and 7.25 percent, the BSP raised its
inflation forecast to 7 percent to 9 percent this year, surpassing
its inflation target of 4 percent to 6 percent.
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