• Weak peso boosts govt debt

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    Foreign debt up by P60B, domestic down
    THE national government’s outstan-ding debt in June increased by P60 billion and pushed the total liability in the first half of 2016 up by P130 billion, or 2.24 percent, to P5.94 trillion.

    The increase was entirely due to higher foreign debt, which jumped by 144.64 billion to almost P2.12 trillion and accounted for 35.6 percent of the total debt.

    In contrast, the domestic debt—liabilities in local currency from Filipino residents, firms and organizations—that totaled P3.82 trillion, representing 64.3 percent of the total, was P10.58 billion less than the domestic debt in the first half of 2015.

    The issuance of government securities in June contributed P31.12 billion while the depreciation of the peso against the US dollar added P130 million to the domestic debt, the Bureau of Treasury said.

    The depreciation of the peso also impacted on foreign debt and increased the peso value of outstanding obligations by some P34.3 billion. This, the Bureau said, far outpaced net repayments totaling P3.14 billion.

    For the month of June, the Bureau said it used foreign exchange rate of P47 compared with P46.72 in the previous month and P45.2 a year earlier.

    In terms of external debt or borrowings from foreign accounts abroad, the government has amassed P2.11 trillion debt, which is a 7.2 percent jump from P1.97 trillion in the same period in 2015, and 1.5 percent higher from P2.08 trillion at end-May 2016.

    Guaranteed debt
    Borrowings guaranteed by the national government at the first half rose 40.2 percent to P563.28 billion from P401.9 billion in the same period last year. This also increased by 25.7 percent compared with P448.2 billion at end-May.

    “The change is primarily due to the adjustment and reconciliation of outstanding guarantees extended by the National Government” according to Treasurer Roberto Tan.

    The BTr further explained that foreign exchange fluctuations against the US dollar and third currencies further increased the peso value of external guaranteed debt by P1.85 billion and P9.70 billion, respectively.

    This was tempered by net repayments on the government’s domestic guarantees with that of the National Food Authority (NFA) amounting to P1.58 billion from its credit line with the Land Bank of the Philippines (LandBank) and the Development Bank of the Philippines (DBP) and repayment on external guarantees amounting to P1.26 billion.

    For the month of June, the BTr noted it used a foreign exchange rate of P47 compared with P45.2 and P46.72 used a year earlier and a month earlier.

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