NG debt up 3.8% at P5.95T in 2015

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Debt-to-GDP ratio improves to 44.8%

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THE national government’s outstanding debt increased last but its proportion to gross domestic product (GDP) continued to decline, the Bureau of the Treasury (BTr) reported      on Thursday.

Treasury data placed government debt at P5.954 trillion as of end-December, up 3.8 percent from the previous year. From November, the tally was 0.03 percent higher.

With full-year economic growth reaching 5.8 percent, the debt-to-GDP ratio continued on a downward trajectory to 44.8 percent from 45.4 percent in 2014, the bureau said.

In a statement, the Department of Finance said the improvement in the debt-to-GDP ratio, a measure of sustainability, can be attributed to sustained economic growth plus disciplined fiscal spending that moderated borrowing requirements for the year.

“The average Filipino now lives in a time when news about government debt, usually a headache to all, is now one of many examples of consistent year-on-year improvement being made by our country. We hope this trajectory of better and better news can be kept for the next six years and beyond,” Finance Secretary Cesar Purisima was quoted as saying.

Purisima said he was optimistic that the debt-to-GDP ratio, which from 52.4 percent in 2010 has narrowed by 7.6 percentage points, could further be trimmed.

“The Philippines is fully committed to a proactive liability management strategy to keep our debt structure resilient,” he said.

The local component of total debt stood at P3.884 trillion, a 1.7-percent rise compared to 2014. Measured against November, domestic debt decreased by 0.3 percent.

Focusing on the month-on-month easing, the Treasury bureau said this was due to the net redemption of government securities amounting to P11.35 billion, which offset a P20-million upward adjustment in the peso value of foreign currency liabilities.

The agency noted that the peso depreciated from P47.10 as of end-November 2015 to P47.15 at the end of the year.

Foreign debt, meanwhile, increased by 8.1 percent year-on-year but rose by 0.6 percent month-on-month to P2.070 trillion.

“This was due to the combined effect of net availments worth P3.81 billion and peso depreciation as dollar- and 3rd currency- denominated debt gained P2.18 billion and P7.26 billion in local currency valuation, respectively,” the Treasury bureau said.

The country’s foreign borrowings in December were priced at an exchange rate of P47.15 to a dollar.

Debt guaranteed by the national government, meanwhile, rose by 2.7 percent to P438. From November, guaranteed debt eased by 0.5 percent.

The Treasury said this reversed the effect of currency fluctuations that raised the peso value of guarantees by P2.91 billion.

“A challenging external environment calls for consistent discipline in making sure productive debt works in our favor. We will continue to stretch average maturities reasonably (now at 10 years) and keep a healthy preference for domestic financing (now at 67 percent),” Purisima said.

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