PH debt hits new high of P11.07 trillion in May

MANILA, Philippines – With more domestic loans to fund the protracted fight against COVID-19, the national government’s outstanding debt rose to a new high of P11.07 trillion at the end of May.

The latest Bureau of the Treasury data released on Monday (July 5) showed that last month’s outstanding commitments breached the P11 trillion mark for the first time after rising 0.7 percent from P10.99 trillions in April and climbed 24.5 percent from P8. 89 trillion in 2020.

In a statement, the Treasury said local debt, which accounted for 71.5 percent of the total, rose 1.3 percent month-on-month and jumped 31.2 percent year-on-year to P7.92 trillion, mainly due to the sale of several government securities.

The government increased the volume of its weekly government bonds and bonds in recent months as domestic sources will account for P2.6 trillion out of the total P3.1 trillion loans programmed for 2021.

On Monday, the Treasury sold all P15 billion. In short-term T-bills, it offered even though interest rates rose everywhere, in part because of “long-standing concerns over the Delta variant” of COVID-19 plus still over the target year-to-date inflation, national treasurer Rosalia de Leon said.

Total inflation at the end of May averaged 4.4 percent or higher than the target range of 2 to 4 percent, while the June rate on Tuesday was expected to remain above 4 percent.

Ateneo de Manila University’s Ser Percival Peña-Reyes expected inflation of 4.3 percent last year, while Moody’s Analytics’ Steven Cochrane sees 4.5 percent due to more expensive fuel.

The Ministry of Finance nevertheless allocated P5 billion. In benchmark 91-, 182-, and 364-day IOUs. Rates rose to 1,044 percent from 1,031 percent last week for the three-month debt securities; 1.351 percent from 1.332 percent earlier for the six-month securities; and 1.568 percent from 1.562 percent for one-year government debt bills, even though they were all below the secondary market level, the Treasury said.

Across the three tenors or maturity periods, Monday’s auction of Treasury bills attracted P49.3 billion, or more than three times the total bid.

In terms of external debt, the Treasury said the stronger peso helped reduce the stock at the end of May by 0.7 percent month-on-month to P3.16 trillion. The peso ended May at 47,725: $ 1 from 48,156 against the greenback in April, the Treasury noted.

In addition to the revaluation of the peso, the Treasury also pointed to a net of around P220 million in foreign loans repaid in May last year.

However, the foreign debt pile still rose 10.5 percent from P2.86 trillion a year ago.

Several new loans will be added to the Philippines’ external debt in the short term, such as the World Bank’s $ 200 million second financing reform to finance development policy – the latest addition to the Washington – based lender’s pipeline of 13 upcoming loans worth a total of $ 2. 98 billion

This upcoming loan will “support financial sector reforms that will help the Philippine government achieve a resilient, inclusive and sustainable financial sector,” the World Bank said, similar to the first tranche of $ 400 million it approved just last month. .


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