Gov't Debt

Outstanding gov't debt at P7.73 trillion as of June
 
THE COUNTRY'S outstanding public sector debt (OPSD) reached P7.73 trillion as of June, the government reported on Friday.

In a statement, the Finance department said the consolidated outstanding debt of the public sector was equivalent to just 70.2% of the country's gross domestic product (GDP) for the period.

This is smaller than the 73.1% OPSD-to-GDP ratio recorded as of the same period last year. This is likewise down from the 71.3% ratio as of March.

The Philippine economy grew by 7.7% in the first quarter and 7.6% in the second quarter, bringing first-half GDP growth to 7.65%. In nominal terms, the GDP totaled P11.016 trillion in the six-month period.

The OPSD represents the total outstanding debt of the national government (NG), local government units (LGUs), the 14 monitored non-financial government corporations (MNFGCs), social security institutions, the Bangko Sentral ng Pilipinas (BSP), and government financial institutions (GFIs), minus the government's holdings of its own debt through the above entities and the Bond Sinking Fund (BSF).

Broken down, the domestic debt of the public sector as of end-June totaled P5.52 trillion. Meanwhile, foreign public sector debt amounted to P2.21 trillion.

"As of June 2013, 28.7% of the total consolidated outstanding public sector debt is owed to foreign creditors, and the remaining 71.3% is owed to domestic creditors," the Finance department said.

Meanwhile, on a per sector basis, of the total outstanding public sector debt, non-financial liabilities -- the debt of the national government, LGUs, government corporations, and social security institutions -- amounted to P5.7 trillion as of June 2013, equivalent to 51.8% of GDP.

This is greater than the P5.44 trillion recorded as of June last year, which was, however, equivalent to a higher ratio of 54% of GDP.

The end-June 2013 level was also higher than the P5.45 trillion recorded as of March 2013, which was just 50.4% of the economy.

"This was attributed to the P169.8 billion increase in NG debt, the LGUs, and the increase in debt of both the domestic and foreign liabilities of the 14 MNFGCs," the Finance department said.

For financial public corporations, their outstanding debt stood at P3.78 trillion as of June, higher than the P3.404-trillion year-ago level but down from the end-March 2013 tally of P3.888 trillion.

"Bangko Sentral ng Pilipinas (BSP) debt registered a decrease of 2.8%, offset by a slight increase of 0.1% in the debt of the Government Financial Institutions (GFIs) from March 2013 level," it noted.

The government's holdings of its own debt totaled P1.72 trillion in the first semester.

Meanwhile, general government (GG) debt -- which consolidates the outstanding debt of the national government, LGUs, the Central Bank Board of Liquidators (CB-BOL), and social security institutions -- amounted to P4.315 trillion as of the first semester.

This was higher than the end-June 2012 level of P4.153 trillion and the P4.156 trillion registered as of March 2013.

As a percentage of the economy, these liabilities comprised 39.2% of GDP in the first semester, improving from the 41.2% ratio recorded as of the same period last year but slightly higher than the 38.5% GG debt-to-GDP ratio registered as of March.

Debt as a percentage of GDP is a measure used by many debt watchers to assess the creditworthiness of sovereigns.

A smaller ratio indicates that a country has more than enough resources to settle its liabilities.

source:  Businessworld, 12/13/2013