1 week ago
13
The Philippine government’s total debt reached a record high of ₱16.31 trillion after the government borrowed an additional ₱261.5 billion in January.
“This level remains manageable,” the Bureau of the Treasury (BTr) said in a March 4 statement, despite reporting a 1.6 percent increase in the volume of the government debt.
While it reversed the modest slowdown in December, the BTr said this is still “in line with the government’s target to support economic development while ensuring fiscal sustainability.”
Increased domestic and foreign loans, alongside the depreciation of the peso against the US dollar, were the main contributors to the debt hike, the BTr said.
Domestic debt made up 67.9 percent of the total, while external borrowings accounted for 32.1 percent. This fell short of the government’s programmed borrowing mix of 80:20—80-percent domestic, 20-percent foreign.
As of end-January, domestic debt rose to ₱11.08 trillion, up by ₱153.7 billion or 1.4 percent from December 2024.
According to the BTr, this uptick was mainly because the Marcos administration borrowed more money by issuing over ₱270-billion worth of debt papers, while it only paid back ₱117.8 billion. It has yet to pay ₱152.2 billion in debt securities it issued.
These borrowings helped fund the projected budget deficit for the quarter, according to the BTr.
Additionally, the peso’s depreciation against the US dollar contributed ₱1.51 billion to the total debt—0.58 percent of the total increase.
Meanwhile, the government’s foreign debt reached ₱5.23 trillion in January, rising by ₱107.8 billion or 2.1 percent from December 2024.
The increase was due to ₱59.3 billion in net foreign loan borrowings and an additional ₱48.5 billion from currency fluctuations, including US dollar and third-currency movements.
On the other hand, the government’s guaranteed obligations decreased by 0.1 percent ₱346.3 billion. This came as a result of the net repayments in domestic guarantees worth ₱1.6 billion and ₱250 million in external guarantees.
The repayment of matured guarantees offset the currency valuation adjustments, which added ₱830 million from US dollar movements and ₱580 million from third-currency fluctuations.
The latest BTr data seen by Manila Bulletin showed that of the end-January debt stock, the bulk amounting to ₱13.79 trillion are debt securities or commercial borrowings; the rest or ₱2.52-trillion worth are loans.
By type of currency, peso-denominated debt reached ₱10.97 trillion or more than two-thirds of total. Foreign currency-denominated obligations amounted to $91.5 billion or about ₱5.34 trillion.
Over four-fifths of the national government's debt are long-term borrowings maturing in over 10 years, amounting to ₱13.22 trillion.
At end-January, ₱2.33 trillion (14.3 percent of total) were medium-term debts maturing between one and 10 years; and ₱766.4 billion (4.7 percent) in short-term debt maturing within less than one year.
According to documents on the 2025 national budget, outstanding debt is projected to climb to a record ₱17.35 trillion by year-end, with an estimated ₱11.98 trillion sourced locally, while the remaining ₱5.38 trillion will come from external sources.
For this year, the government plans to borrow ₱2.04 trillion from domestic creditors, mainly through the issuance of treasury bills and bonds. Foreign borrowings, meanwhile, will amount to ₱507.4 billion in 2024, bringing the total financing program to ₱2.55 trillion, slightly lower than last year's ₱2.56 trillion in gross borrowings.
Due to its bigger obligations, the government repaid ₱2.02 trillion in debt last year. This year, debt servicing would inch up to ₱2.05 trillion.
