The outstanding debt of the government rose 6.57 percent in March as it continued to rely on borrowings to partly fund its expenditure requirements.
The Bureau of Treasury, a unit of the Department of Finance, reported that the country’s debt stock reached P5.63 trillion as of end-March.
The amount was also P37 billion higher from the P5.59 trillion recorded the previous month.
Of the outstanding liabilities, a bigger portion or P3.66 trillion was accounted for by peso-denominated liabilities. This represented an increase of 7.36 percent year-on-year.
Domestic borrowings are done mainly through the sale of Treasury bills and bonds.
The Aquino administraton has maintained a policy of borrowing more from the domestic market rather than from foreign sources to avoid incurring too much foreign exchange risks.
The balance of P1.97 trillion was accounted for by debt denominated in foreign currencies. This was 1.02 percent higher.
Foreign borrowings comprise loans secured from development lenders such as the World Bank, Asian Development Bank and the Japan International Cooperation Agency.
Borrowings by the government are aimed at plugging the country’s budget deficit.
Total guaranteed debt stood at P471 billion, down 1.88 percent year-on-year. This is largely due to the reduction in external guaranteed obligations – a product of net repayments and currency adjustments.
Despite the continued increase in government’s outstanding debt, the country’s liabilities remain manageable as it has been able to keep its budget to two percent of gross domestic product (GDP).
The government’s debt stock as of the end of 2013 went up by only 4.5 percent to P5.68 trillion.
Given this, the ratio of debt to GDP stood at P4.53 trillion or 39.2 percent, lower than the P40.6 percent (P4.28 trillion) recorded in 2012 as a result of the ongoing fiscal consolidation.
The country’s deficit also accounted for 1.3 percent of GDP last year.
source: Philippine Star
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