NG debt reaches a new high of P15.48-T

By means of Beatriz Marie D. Cruz, News reporter

THE NATIONAL GOVERNMENT (NG) outstanding debt rose to a new high of P15.48 trillion at the end of June.FThe Bureau of the Treasury (BTr) said on the impact of the depreciation of the peso against the US dollar.

BTR data on Tuesday showed outstanding debt rose 0.9% to P15.48 trillion at the end of June from P15.35 trillion at the end of May.

Year over year, the debt burden increased by 9.4%, compared to P14.15 trillion a year ago.

In a statement, the BTR said the increase in debt was “due to the net issuance of both domestic and foreign debt and the eFconsequence of the depreciation of the peso.”

“This was partially offset by the impact of the depreciation of the third currency on the valuation of corresponding debt denominated in those currencies,” it added.

According to the BTR, the peso depreciated 13.4 centavos to P58.658 per dollar at the end of June. P58,524 per dollar as of the end of May.

The largest share, 68.29% of the total debt burden, came from domestic sources.

At the end of June, outstanding domestic debt rose 1.2% to P10.57 trillion from P10.44 trillion in the previous month. Year on year, it increased by 9%, from P9.7 trillion.

“The increase in domestic debt was mainly driven by the net issuance of government bonds of P129.89 billion and the P0.39 billion effect of the depreciation of the peso on foreign currency-denominated domestic debt,” the ministry said. Finances.

At the end of June, government bonds accounted for almost all of the domestic debt.

Meanwhile, external debt, which accounted for 31.71% of the total, rose 0.1% to P4.91 trillion as of end-June from P4.9 trillion in the previous month.

External debt increased 10.5% from P4.45 trillion in June 2023.

“The increase is attributed to P7.95 billion in net utilization and the P11.23 billion upward revaluation of U.S. dollar-denominated debt due to the depreciation of the peso. This was partially offset by the P13.56 billion effect of favorable adjustments to the third currency,” the BTr said.

External debt consisted of P2.29 trillion in loans and P2.62 trillion in global bonds.

This consisted of P2.22 trillion in US dollar bonds, P217.39 billion in Euro bonds, P62.92 billion in Japanese yen bonds, P58.66 billion in Islamic certificates and P54.77 billion in global peso bonds.

Meanwhile, NG’s guaranteed liabilities fell 1.9% to 343.65 billion euros at the end of June, from 350.2 billion euros at the end of May. It also declined 7.1% from P369.73 billion in the same period in 2023.

“The decline was mainly driven by the net repayment of both domestic and external guarantees amounting to P5.02 billion and P0.73 billion, respectively,” the BTr said.

“In addition, the impact of adjustments to the third currency against the U.S. dollar, amounting to P1.18 billion, couldFto offset the P0.37 billion increase due to the depreciation of the peso.”

Robert Dan J. Roces, chief economist at Security Bank Corp., said the higher debt at the end of June was partly due to the depreciation of the peso against the U.S. dollar, “which inFdetermined the value of foreign-denominated debt.”

“To manage this properly, the government may have to increase income through EFFcient tax collection and expenditure and prioritizing economic growth to increase debt repayment capacity,” he said in a Viber message.

Jonathan L. Ravelas, senior advisor at Reyes Tacandong & Co., said the higher debt burden can also be attributed to “increased economic recovery andFfortresses (subsidies and infrastructure spending).”

Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, Inc., said the higher debt levels are due to higher interest rates.

NON-PROGRAMMED CREDITS
Meanwhile, Treasury Secretary Ralph G. Recto warned Tuesday of additional borrowing to finance unprogrammed credits next year. He said these could raise the ratio of public debt to gross domestic product (GDP) from 61.4% to 61.4% by the end of the year. 60.3%.

From the FIn the first quarter, NG debt to GDP stood at 60.2%, slightly above the 60% threshold considered manageable for developing economies.

At a hearing of the Senate Health and Demography Committee, Mr Recto said he used debt mainly toffofficial development assistance (ODA) projects would increase the limitFicit/GDP ratio to 6.4% at the end of 2024. The government has set the deficit ceiling this year at 5.6% of GDP.

“In eFIf all goes well, we will miss our medium-term budget programme, and this could put pressure on our investment grade rating. “If we deny (foreign subsidized projects) funding, implementation will be delayed and we will incur opportunity costs that will be borne by the public who are deprived of the convenience that such projects bring,” he said.

The treasury chief said the additional loans would mean interest payments would increase by P12.7 billion annually.

Projects financed with non-programmed appropriations include the Davao City By-Pass Construction Project, Samal Island Davao City Connector Project, Panay-Guimaras-Negros Island Bridges, Bataan-Cavite Interlink Bridge Project and the Metro Manila Subway Project, according a DoF statement. .

Mr Recto defended the Department of Finance’s (DoF) order to withdraw from the idle funds of Government Managed and Controlled Companies (GOCCs), which he said was above board.

The DoF had consulted the Commission on Audit, the Governance Commission for GOCCs and the Office of the Government Corporate Counsel before transferring the funds, he said.

“But please put together the expenditure program without inflating the unprogrammed appropriations, because this will distort the economic situation of the country. Fiscal plan,” Mr. Recto urged lawmakers during the hearing. — of John Victor D. Ordoñez