THE national government’s outstanding debt continued its month-on-month downward trajectory in September, but still posted a year-on-year increase, reaching P17.455 trillion as of end-September.
According to the latest data from the Bureau of the Treasury (BTr), the government’s outstanding debt dipped by 0.07 percent from P17.468 trillion as of end-August.
Of the total debt stock, 68.6 percent consists of domestic debt, while the remaining 31.4 percent was borrowed from foreign sources.
Domestic debt went down by 0.94 percent month-on-month to P11.972 trillion as of end-September from P12.087 trillion, as the government paid off more borrowings.
The Treasury said total repayments exceeded new issuances by P117.29 billion, more than offsetting the P3.16-billion upward revaluation from the peso depreciation against the retail dollar bonds.
Meanwhile, external debt inched up by 1.9 percent to P5.482 trillion as of end-September from P5.381 trillion as of end-August.
The weaker peso caused the value of foreign obligations to rise, as this movement more than offset the P1.30 billion in net loan repayments and P2.1 billion in third-currency fluctuations, the Treasury explained.
‘The continued decrease reflects the government’s sound fiscal discipline, strategic borrowing strategy, and proactive liability management, supported by steady market conditions and robust domestic investor confidence,’ the Treasury said in a statement.
Despite this, the government’s outstanding debt jumped by 9.83 percent year-on-year from P15.893 trillion.
Local debt grew 9.48 percent from P10.936 trillion as of end-September last year, while external debt rose by 10.60 percent from P4.957 trillion.
‘Finally aware’ of wastage
Ateneo de Manila University economist Leonardo A. Lanzona told the BusinessMirror that the flood control scandal has made the government ‘finally aware’ of the wastage from indiscriminate use of resources for projects or investments that don’t generate enough return.
‘This can reduce the debt for some time. But the weaknesses of the peso and the continued trade deficits can result in even higher debt in the future,’ Lanzona warned.
The peso depreciation makes the debt problem ‘worse’ by making the peso value of foreign obligations more expensive, which creates a ‘challenging’ cycle that requires careful fiscal management from the government.
Trade deficits can also force the government to borrow as the country needs to pay for its imports, Lanzona added.
The government is targeting to reduce its outstanding debt to P17.359 trillion by the end of the year.
But as the peso weakens, Lanzona said this would be ‘challenging’ for the government to achieve.
‘The September figures affirm the Marcos, Jr. administration’s strong fiscal discipline and proactive debt management, ensuring that government financing remains sustainable, strategic, and supportive of the country’s growth priorities,’ the Treasury said.
The country’s debt-to-GDP ratio, or the outstanding debt as a share of the overall economy, jumped to 63.1 percent in the second quarter of this year from 60.9 percent in the same period a year ago.
The government estimates the debt-to-GDP ratio to ease to 61.3 percent by the end of 2025, and further decline to 58 percent by end-2030.