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The national debt will drop to P14.93 trillion at the end of March



Outstanding debts of the national government

THE NATIONAL GOVERNMENT (NG) Outstanding debt fell to P14.93 trillion at the end of March, the Bureau of the Treasury (BTr) reported.

Data from the BTr on Wednesday showed NG debt stocks fell 1.67% from the record high of P15.18 trillion in late February due to the net redemption of government bonds.

However, outstanding debt rose 7.71% from P13.86 trillion in the same period a year ago.

Year to date, the debt portfolio has increased by 2.12% from P14.62 trillion at end-December 2023.

At the end of March, more than two-thirds (68.86%) of debt came from domestic sources.

Domestic debt fell 2.83% to P10.28 trillion at the end of March, compared to P10.58 trillion in the previous month. However, it rose 8.03% from P9.51 trillion a year ago.

Government bonds accounted for almost all of the domestic debt at the end of March.

“The decline (in domestic debt) was due to the net redemption of government bonds of P299.45 billion.Ffsetting of the P0.24 billion eFeffect of the depreciation of the peso on domestic foreign currency debt,” the BTR said in a statement.

BTR data showed the peso weakened by 8.6 centavos to P56.26 against the dollar at the end of March from P56.174 at the end of February.

Meanwhile, external debt rose 1% to P4.65 trillion at the end of March from P4.6 trillion at the end of February. Year on year, it rose 7.01% from P4.34 trillion.

“The increase was due to the net utilization of foreign loans amounting to P44.01 billion, as well as the depreciation of the local currency, which contributed to the valuation of U.S. dollar-denominated debt by P7.05 billion. This more than oFoffset the P4.83 billion impact of the appreciation of third currencies against the dollar,” the BTr said.

External debt consisted of P2.22 trillion in loans and P2.43 trillion in global bonds.

The NG’s guaranteed liabilities rose 0.3% to P346.04 billion at the end of March, compared to P344.93 billion in the previous month.

“The increase in the level of NG guarantees was due to the net utilization of domestic guarantees amounting to P2.48 billion and the P0.25 billion effect of the depreciation of the local currency against the U.S. dollar on external guarantees,” said the BTr.

“On the other hand, the net repayment of external guarantees offset €1.15 billion, while the net increase in the value of guarantees denominated in third currencies reduced €0.47 billion,” it added.

On a year-over-year basis, guaranteed liabilities declined 9.9% from P384.12 billion.

Michael L. Ricafort, chief economist of Rizal Commercial Banking Corp., said the government’s repayment of maturing debt has reduced the overall debt burden.

“The month-on-month decline in outstanding NG debt was largely driven by large government bond (RTB) maturities in early March 2024, but was offset by previous record issuances of RTBs in late February 2024,” he said.

Outstanding debt could also increase further due to future global bond issuance, higher interest rates and further weakening of the peso.

Meanwhile, the Department of Finance (DoF) said it has lined up $1.5 billion worth of projects with the Japan International Cooperation Agency (JICA) from this year until 2025.

“The DoF will undertake approximately $1.5 billion worth of pipeline projects with JICA over the 2024-2025 period and is working to conclude four major loan agreements within the year,” the ministry said in a statement on Thursday.

The loan agreements will cover projects in the areas of maritime safety, roads and Fflood risk management.

“Apart from the usual portfolio of infrastructure projects financed by JICA, the agency shared that it is expanding into other sectors aligned with the Marcos administration’s development goals, such as agriculture, education and health,” it added.

The DoF and JICA are set to Fcomplete the signing of the projects before the end of the year.

JICA plans to commit an average of about $1.6 billion annually for the country through 2027, it added.

The Ministry of Finance also said that JICA is investigating the co-financing of the Climate Change Action Program (CCAP), sub-program 2. The program aims to accelerate the implementation of national climate policies.

At the end of December, the JICA was the main source of offofficial development aid, accounting for 32.8% of the total, or $12.3 billion. Luisa Maria Jacinta C. Jocson