The Philippine government’s outstanding debt rose slightly in February compared with the same time last year as both domestic and foreign obligations increase, the government said over the weekend.
Data from the Bureau of Treasury (BTr) showed that the government’s total debt in February amounted to P5.941 trillion, 3.2 percent higher than the P5.757 trillion in February 2015.
February government borrowing was 0.7 percent higher month-on-month from January 2016’s P5.900 trillion, but still 0.2 percent lower for the year to date than the comparative period in 2015.
The government’s outstanding debt during February was composed of 64.8 percent local borrowing and 35.2 percent foreign external debt.
The state’s domestic debt — or debt in local currency from Filipino residents, firms and organizations — in February totaled P3.85 trillion, 0.57 percent more than the $3.828 trillion in February 2015, and 0.7 percent higher than the P3.824 trillion in January.
The Btr said the rise in domestic debt during the month was “primarily due to the net issuance of government securities amounting to P26.16 billion, offsetting the effect of peso strengthening against the US dollar, which reduced the peso value of domestic debt by P0.13 billion.”
Year-to-date, the bureau said domestic borrowing is still P34.24 billion lower than end-December 2015 levels.
In terms of external debt or borrowings from foreign accounts abroad, the government has amassed P2.091 trillion debt, which is a 8.3 percent jump from P1.929 trillion in the same month in 2015 and a 0.7 percent increase from P2.076 trillion in January 2016.
The Btr said the external debt’s month-on-month expansion was because of the impact of foreign exchange fluctuations on third-currency denominated debt that raised the peso value by P22.36 billion.
It added that the forex effect has overshadowed the impact of a stronger peso against US dollar, and net repayments that reduced the peso value of debt by P5.09 billion and P2.67 billion, respectively.
From December 2015, the government’s foreign debt has increased by 1 percent or P20.51 billion.
Borrowings guaranteed by the national government in February went up by 8.9 percent to P454.54 billion from P414 billion in the same month last year. This also increased by 2.7 percent compared to the P442 billion in January.
“The increase was due to the combined effect of net drawdowns on domestic guarantees from credit lines with DBP [Development Bank of the Philippines] and LBP [Land Bank of the Philippines] amounting to P3.77 billion, and the impact of third currency fluctuations against the dollar that raised the peso value of guarantees by P9.39 billion,” the Treasury said.
“This more than outweighed net repayments and local currency appreciation that reduced the peso value of external guarantees by P0.36 billion and P0.74 billion, respectively,” it added.