THE national government’s outstanding debt slightly dipped to P17.468 trillion as of the end of August, with the debt stock seen to increase in the coming months due to more borrowings.
Latest data from the Bureau of the Treasury (BTr) showed the outstanding debt posted a marginal drop of 0.5 percent or P95.07 billion from P17.563 trillion from end-July.
The Treasury explained this was due to the full repayment of local bonds worth P526.34 billion and a stronger peso, which reduced the value of the country’s external debt.
According to John Paolo Rivera, senior research fellow at state-run think tank Philippine Institute for Development Studies, the decline in outstanding is due to scheduled debt repayments, which are normal and expected in managing liabilities.
‘However, this does not signal a downward trend. [Year-on-year], the debt stock is still significantly higher indicating continued borrowing to finance the budget deficit and support expenditures,’ Rivera told BusinessMirror.
The outstanding debt rose by 12.3 percent from P15.550 trillion during the same period a year ago.
Of the total debt stock, 69.19 percent was borrowed locally, while 30.81 percent came from foreign sources.
The Treasury said this is a ‘generally more favorable debt position,’ since domestic debts are less vulnerable to shifts in foreign exchange movements.
‘[D]omestic borrowing is largely owed to Filipinos themselves, providing a safe and secure investment vehicle for wealth growth while also ensuring that the money circulates back into the local economy,’ the Treasury added.
Broken down, domestic debt as of end-August amounted to P12.087 trillion, up by 12 percent from P10.791 trillion in the same period a year ago.
Compared to the previous month’s level, domestic debt inched down by 0.2 percent or P21.39 billion from P12.108 trillion.
Meanwhile, external debt as of end-August increased by 13.1 percent, reaching P5.381 trillion from P4.758 trillion a year ago.
However, it declined by 1.4 percent or P73.68 billion from P5.455 trillion as of end-July.
Reinielle Matt Erece, economist at Oikonomia Advisory and Research, Inc., told BusinessMirror that the outstanding debt will increase towards the end of the year as the government continues to tap the domestic market for funds.
In the fourth quarter of the year, the Treasury plans to borrow P437 billion through the sale of government securities.
‘The strong demand for Philippine government securities and the issuance of these debt papers can further increase the country’s outstanding debt,’ Erece said.
‘We hope to see these funds put into good use, in that case the increase in debt is justified,’ he added.
Meanwhile, Rivera said that in the coming months, the government could frontload its borrowings, ramp up infrastructure spending and manage fiscal needs amidst inflation and global uncertainty.
‘The overall trend remains upward, even with temporary month-on-month dips,’ Rivera noted.
‘The Bureau reaffirmed its commitment to prudent debt management and responsible borrowing, ensuring that financing activities remain aligned with the country’s high and inclusive growth agenda, while safeguarding the welfare of future generations of Filipinos,’ the Treasury said.
By yearend, the outstanding debt is projected to reach P17.359 trillion, with a debt-to-GDP ratio of 61.3 percent.
The outstanding debt is seen to hit the P19-trillion mark, increasing to P19.057 trillion by end-2026.