Debt level ‘remains manageable’ — BTr
The national government’s outstanding debt rose to P16.919 trillion in May — up 0.99 percent from April and 10.24 percent higher than a year earlier — but remains “manageable,” the Bureau of the Treasury (BTr) said.
In a statement issued on Thursday, the BTr said the slight increase from April’s P16.753 trillion level was mainly due to the net issuance of domestic securities, reflecting “sustained investor confidence in the Philippine economy.”
This was partially offset by valuation gains from a stronger peso, which tempered the peso value of foreign-denominated obligations, it said.
As of May, domestic borrowings accounted for 69.6 percent of total debt, while external obligations made up 30.4 percent — a composition the BTr said underscores the government’s preference for local financing to minimize foreign exchange risk and support the local capital market.
“The government remains committed to its prudent debt management strategy, ensuring borrowings are strategically aligned with fiscal objectives and overall macroeconomic stability,” the BTr said.
Domestic and foreign debts
Domestic debt reached P11.781 trillion, up 1.64 percent from the previous month. This was largely driven by P190.87 billion in net issuances, slightly offset by a P0.91 billion reduction in valuation from peso appreciation against the dollar.
External debt, meanwhile, slipped by 0.46 percent to P5.138 trillion due to P3.55 billion in net repayments and a P29.35 billion downward revaluation caused by the stronger peso. These were partially offset by a P9.14 billion revaluation gain from third-currency fluctuations against the US dollar.
Record high
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the new debt record reflects the continued fiscal shortfall, which necessitates sustained borrowing by the government.
“The stronger peso in May helped temper the rise in foreign debt when expressed in pesos,” Ricafort said. “However, over the past three years, the peso’s depreciation of about 10 percent against the US dollar has effectively increased the peso value of the government’s external obligations.”
