Additional domestic and foreign borrowing as well as a weaker peso further raised the national government’s outstanding debt to a new high of 11.920 billion pesos in September.
Latest data from the Treasury Office (BTr) on Friday showed bonds outstanding at the end of September rose 2.4% from 11.64 trillion pesos in August and 27.2% from 9 , 37 trillion pesos a year ago.
Domestic debt, which accounted for 70.4% of the total, increased 2% month-on-month and 30.3% year-on-year to reach 8.39 trillion pesos in September.
In a statement, the Treasury said locally sourced debt increased further month-over-month due to a net issuance of Treasury bills and bonds, or greater volume of government securities sold in September than those matured.
A net IOU of 167.45 billion pesos was added to the domestic debt pile last month, according to Treasury data.
The stock of external debt, meanwhile, rose 3.1 percent mo and 20.4 percent yoy to reach 3.53 trillion pesos at the end of the first nine months.
In addition to the 43.99 billion peso net amount of foreign loans, which went into effect last month, the peso’s depreciation to 50.879: $ 1 at the end of September from 49.762 against the US dollar in August also added. 76.82 billion pesos to the external debt of the national government. obligations.
The government has attempted to minimize these currency risks by borrowing most of its financing needs from the local debt market, which has continued to overflow with liquidity despite the protracted COVID-19 pandemic.
As the outstanding debt grew faster than the economy during the first half of the year, the debt-to-gross domestic product (GDP) ratio stood at 60.4% at the end of June, above the 60% threshold, which debt watchers considered a manageable level among emerging markets.
The debt-to-GDP ratio, which reflected an economy’s ability to repay its obligations, was scheduled to end 2021 at a peak of 59.1% in 16 years, with outstanding national government bonds ahead. to settle at 1173 trillion pesos by the end of the year.
Amid the pandemic-induced economic crisis, declining incomes forced the government to borrow more through concessional loans from multilateral banks and bilateral development partners as well as bond issues in the markets. domestic and offshore commercial debt.
This pushed the Philippines’ debt-to-GDP ratio to 54.6% in 2020, from a record high of 39.6% in 2019.
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