Govt debt fell to P9.36T in September

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The government’s outstanding debt slid to P9.36 trillion at end-September on smaller domestic borrowings, according to the Bureau of the Treasury (BTr).

Data from the Treasury bureau showed on Thursday that the amount was a 2.6-percent or P246.15-billion decline from P9.61 trillion at end-August.

Of the figure, 31.3 percent was generated from external creditors and 68.7 percent was raised locally.

Local debt reached P6.43 trillion, a 4.1-percent reduction from end-August’s P6.71 trillion, while foreign debt rose by 1 percent to P2.93 trillion.

Outstanding obligations a year ago were at P7.90 trillion, of which P5.25 trillion were domestic and P2.64 trillion were external.

The Treasury traced the decreased local debt to repayment, and said domestic gross borrowings hit P2.63 trillion at end-September.

Of the issuances, P1.01 trillion were in Treasury bills, P492.86 billion in Treasury bonds and P827.11 billion in retail Treasury bonds issued in February.

These also include P300 billion in short-term borrowings from the Bangko Sentral ng Pilipinas through a repurchase agreement. Gross maturities reached P1.32 trillion.

The bureau attributed the accelerated foreign obligations to the P33.22-billion net availment of external loans.

“Meanwhile, currency fluctuations on both [the] US dollar and third-currency denominated foreign loans trimmed P3.65 billion and P1.08 billion, respectively, from the peso value equivalent,” it said.

The government’s foreign financing posted an inflow of P550.27 billion in January to September against a debt repayment of P123.19 billion.

Project loan availments in the first nine months settled at P19.31 billion while program loans amounted to P344.89 billion. Offshore bond issuances hit P186.06 billion.

A foreign-exchange rate of P48.42 to the dollar was used for the latest data, compared with end-August’s P48.48:$1. The exchange rate used a year earlier was P51.79:$1.

In a comment, Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort said the reduced government debt might also reflect the -15.5 percent year-on-year decline in state spending last month that lessened the need for more borrowings because of higher base effects.

State expenditures shrank to P350.9 billion from P415.1 billion a year ago.

Ricafort also said the country’s $100.49 billion in gross international reserves (GIR) “provide more than enough buffers” for the government in managing foreign debt.

The latest GIR can cover 9.2 times the country’s short-term external debt based on original maturity and 5.4 times based on residual maturity, according to the Bangko Sentral ng Pilipinas.

Meanwhile, government-guaranteed obligations eased by 0.4 percent or P1.59 billion to P445.39 billion in September.

“The lower level of guarantees was due to the net redemption of both local and external guarantees amounting to P0.16 billion and P1.59 billion, respectively,” the BTr explained.

It said local currency appreciation further reduced the value of these guarantees by P270 million, offsetting the effect of third-currency appreciation reaching to P420 million.

Data from the Department of Budget and Management showed earlier that state debt is seen to hit P10.16 trillion by yearend. If correct, it would be 31.42-percent higher than the P7.73-trillion liabilities at the end of last year.

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