PHILIPPINE DEBT NEW RECORD-HIGH OF P15.689 TRILLION AS OF END-JULY


BTr showed that the Philippines’ sovereign debt has ballooned at P15.689 trillion, up by 1.3 percent from the previous month (Photo courtesy of Philippine Daily Inquirer)
From P15.483 trillion as of end-June 2024, the national government outstanding debt as of end-July this year stood at P15.689 trillion which was “primarily driven by the net issuance of both domestic and external debt” according to the Bureau of Treasury (BTr).
The Treasury’s data showed that majority of the sovereign debt at 68.54% was sourced locally and the remaining 31.46% was sourced externally. Since the beginning of the year, the external debt rose by P338.50 billion or 7.4% while the Philippines domestic debt stood at P10.753 trillion up 1.7% from P10.573 billion as of end-June 2024.
“The rise in external debt can be attributed to the net availments of project loans of P5.25 billion and third-currency upward revaluation of P35.44 billion, albeit partially attenuated by the P14.23 billion impact of peso appreciation against the US dollar,” the BTr said.
“The rise in domestic debt was mainly due to the P180.52 billion net issuance of government securities, although partially tempered by the P490-million downward revaluation effect of peso appreciation1 on US dollar-denominated domestic securities,” it added.
The month-on-month growth in the country’s debt rise by P206.49-billion. According to economist Michael Ricafort, the current record running debt balance “is consistent with the wider budget deficits in recent months that have to be financed.”
Finance Secretary Ralph Recto said that the country’s sovereign debt could balloon to as much as P20 trillion by the end of President Ferdinand Marcos Jr.’s term in 2028, and that the Philippine economy could reach a value of P37 trillion by 2028.
The country can pay off its debt with a lower debt-to-GDP ratio, “For as long as the national government debt-to-GDP ratio would be close or even reduced to below the international threshold of 60% of GDP, this would help sustain the country’s favorable credit ratings at 1-3 notches above the minimum investment grade and fundamentally help sustain the country’s fiscal management and overall debt management over the long-term and for the coming generations.”
Source: Philippine Daily Inquirer
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