Debt soars to record P11.64 trillion

Elijah Felice Rosales – The Philippine Star

October 1, 2021 | 12:00am


MANILA, Philippines — The country’s total debt soared to a new record high of P11.64 trillion in August as government piled up more than P2 trillion in new debts over the past 12 months, the Bureau of the Treasury (BTr) said yesterday.

The BTr said the debt pile jumped  by over 21 percent from P9.61 trillion a year ago due to double-digit hikes in both onshore and offshore borrowings.

With only four months left in the year, government can afford to add only around P88 billion to the debt stock to meet the P11.73-trillion program for the year.

Domestic debt, accounting for nearly 71 percent of the total amount, spiked by more than 22 percent to P8.22 trillion due to more bonds issued by the government.

Foreign or external obligations, meanwhile, surged by close to 18 percent to P3.42 trillion on a mix of securities and loans.

Debt papers owed to investors comprised the bulk of the domestic debt at P7.68 trillion, while loans acquired by the government made up the remaining P540.15 billion. However, the foreign debt was amassed on a 57:43 mix of bonds (P1.95 trillion) and loans (P1.47 trillion).

Based on records from the Treasury, dollar notes accounted for about 78 percent of offshore bonds at P1.52 trillion, while euro bonds (P238.03 billion), samurai bonds (P87.77 billion), peso bonds (P85.57 billion) and panda bonds (P19.25 billion) made up the rest.

On the contrary, guaranteed debt slid by over three percent to P432.21 billion as of end-August, from P446.99 billion a year ago, as the decline in external debt surpassed the uptick in domestic obligations.

As for guaranteed debt, the domestic total grew by almost two percent to P233.11 billion, while the external volume declined by almost nine percent to P199.1 billion.

In August, the government accumulated a net debt of P32.05 billion.

While foreign debt plunged by P68.65 billion from the July level, domestic debt widened by P100.7 billion due to the issuance of bonds.

Economic managers expect debt to reach an all-time high of P11.73 trillion this year and P13.42 trillion in 2022.

For 2021, the government plans to borrow P3.07 trillion, mostly from domestic sources, to cover for a budget deficit seen to hit P1.85 trillion.

The government will then temper its borrowing program to P2.47 trillion in 2022, P2.31 trillion in 2023 and P2.37 trillion in 2024.

The country’s debt has amounted to 60.4 percent of its gross domestic product as of the second quarter, breaching the international standard of 60 percent.

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