Total debt of the national government accelerated in April after the Duterte administration raised its borrowings for the coronavirus response spending, data from the Bureau of the Treasury showed.

Bureau of the Treasury - NG debt climbs to ₱8.6 trillion due to COVID-19 pandemic

As of April this year, the outstanding debt stock of the national government reached ₱8.6 trillion, up by 1.5 percent or ₱123 billion from ₱8.48 trillion in the previous month. Of the total, 67 percent were in domestic, while 33 percent were overseas-sourced.

According to the Treasury, the increase is due to higher borrowings both from offshore and local creditors during the month.

Domestically, government debt increased by 0.9 percent to ₱5.86 trillion in April from the revised ₱5.81 trillion in March.

“The end-March figure [originally ₱5.51 trillion] was subsequently adjusted to reflect the ₱300 billion short-term borrowing through the repurchase agreement with the Bangko Sentral ng Pilipinas (BSP),” the Treasury explained.
During the month, the government also issued a total of ₱50.82 billion IOUs in the local market.

Overseas debt, meanwhile, amounted to ₱2.73 trillion in April, up by 2.7 percent compared with ₱2.66 trillion in March.

“For April, net availment of external loans amounted to ₱87.34 billion as part of the government’s effort to raise concessional financing to address the 2019 coronavirus disease (COVID-19) pandemic,” the Treasury said.

The spike in overseas obligations were trimmed by the stronger peso against the US dollar during the month, which averaged 50.44 from ₱50.78 in the March.
The Treasury said the weaker US dollar reduced the government’s foreign debt by ₱15.1 billion.

Year-on-year, the national government’s debt climbed by 10 percent compared with ₱7.78 trillion in the same period last year.

But despite the increase in nominal terms, Finance Undersecretary Gil S. Beltran said the ratio between the national government’s debt and the country’s economy, or gross domestic product (GDP), remained at an optimal level of 41.8 percent as of March.

Beltran, however, admitted that the government’s debt-to-GDP ratio is expected to climb to 49.8 percent, or ₱9.59 trillion, by the end of this year amid widening funding gap between its revenues and expenditures.

He said that state revenues will significantly weaken this year as economy suffers devastation from the coronavirus pandemic.

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