THE National Government’s (NG) outstanding debt reached P9.615 trillion as of end-August, as it continues to borrow to fund the fight against the coronavirus disease 2019 (COVID-19).
In a report released on Wednesday, the Bureau of the Treasury (BTr) said outstanding debt rose 5% to P9.615 trillion from P9.16 trillion as of end-July. This is also a fifth more than the P7.93 trillion logged in August 2019.
The higher NG debt is attributed to the net issuance of domestic securities, as the government sought to raise more funds for its pandemic response.
Two-thirds of the debt were sourced domestically, while the rest came from external sources.
Outstanding domestic debt jumped 7.3% to P6.71 trillion from end-July’s P6.25 trillion, and 27% up from P5.27 trillion in the same month a year ago. This was due to an increase in the issuance of local government securities to P6.4 trillion, 7.7% higher from July and 21.6% up from August 2019.
The National Government’s external debt reached P2.9 trillion as of end-August, slipping 0.2% from July due to the stronger peso. Year on year, it rose 8.8%.
“For August, the decline in external debt was attributed to the P37.36-billion net effect of local currency appreciation. Meanwhile, net availment of external loans added P27.07 billion, alongside the P4.64-billion effect of appreciation on third-currency denominated external loans,” the Treasury said.
Meanwhile, total guaranteed obligations of the National Government as of end-August stood at P447 billion, 2.6% lower month on month.
“The lower level of guarantees was due to the net redemption of both local and external guarantees amounting to P8.59 billion and P0.42 billion, respectively. Local currency appreciation further reduced the value of external guarantees by P2.85 billion, offsetting the effect of third-currency appreciation amounting to P0.03 billion,” the BTr said.
The Development Budget Coordination Council (DBCC) projected outstanding debt to balloon to a record P10.16 trillion or 53.9% of gross domestic product (GDP) by end-2020.
The government plans to borrow P3 trillion this year to plug its budget deficit, seen to hit 9.6% of GDP.