The country’s consolidated general government (GG) debt jumped as of end-June 2020 from the previous year’s level, as the government had to tap various financing sources to support its coronavirus disease 2019 (COVID-19) pandemic response.
In a statement posted on its website, the DOF said the GG debt stood at P7.9 trillion at end-June 2020, an increase of 16.8 percent from the end-June 2019 level of P6.8 trillion.
As a percentage of gross domestic product (GDP), GG debt registered at 42.1 percent, up by 6.2 percentage points from the end-June 2019 level of 35.9 percent.
Of the GG total debt stock, 64.5 percent or P5.1 trillion were domestic borrowings and 35.5 percent or P2.8 trillion were external borrowings.
Both domestic and external debt increased by 19.8 and 11.8 percent, respectively, as compared to the end-June 2019 level.
To recall, the government started to implement quarantine measures since mid-March of last year to contain the spread of COVID-19. This led to reduced economic activity especially when the strictest level of restrictions was in place in the first few months of lockdown.
The collection of tax revenues was also affected due to mobility restrictions and the temporary closure of businesses during the first implementation of the enhanced community quarantine. Thus, the government had to tap various sources of funding for its COVID-19 response.
The DOF said the increase in GG debt was driven by consolidated national government (NG) debt, amounting to P8.4 trillion, an increase of 15.2 percent from the end-June 2019 level of P7.3 trillion.
The higher level of NG outstanding debt was primarily due to the net issuance and availment of domestic and external financing including the P300 billion short-term repo agreement between the NG and the Bangko Sentral ng Pilipinas.
The NG debt-to-GDP ratio rose from 41.7 percent at end-June 2019 to 48.1 percent for the same period in 2020.
Local government debt increased by 4.2 percent or by P4.3 billion compared to the end-June 2019 level, the DOF said.
Meanwhile, the DOF said social security institutions such as Government Service Insurance System and Social Security System, while not contributing to the debt stock, decreased their holdings of government securities by 4.2 percent compared to the end-June 2019 level. – Angela Celis
