Gov’t debt down slightly to P11.93 trillion at end-November —Treasury

The Philippine government’s running debt balance saw a slight decline as of end-November 2021, data released Wednesday by the Bureau of the Treasury (BTr) shows.

As of end-November this year, the national government’s outstanding debt reached P11.93 trillion, down by 0.3% from P11.97 trillion as of end-October 2021.

The end-November 2021 debt stock level, however, was higher by 17.7% than the P10.13-trillion debt level recorded as of end-November 2020.

Year-to-date, the total running debt balance rose by P2.136 trillion or by 21.8%.

The Treasury attributed the slight decrease “primarily due to the net redemption of domestic securities and favorable foreign exchange rates.”

The government’s total debt is comprised mostly of domestic borrowings at 70.7%, while the remaining balance of 29.3% were externally sourced.

“The latest easing of the outstanding national debt could also be attributed to additional measures to further re-open the economy towards greater normalcy with the nationwide adoption of the Alert Level System/granular or smaller scale lockdowns since November 2021 that are less costly for the government compared to the larger scale lockdowns in the past at the city/provincial/regional levels that have reduced the country’s tax revenues and increased government spending on various COVID programs whenever there were bigger lockdowns,” Rizal Commercial Banking Corporation chief economist Michael Ricafort said in an emailed commentary.

“Thus, further re-opening of the economy would help increase economic/business activities that help increase tax revenue collection and also help reduced government spending on various COVID programs, thereby narrowing the budget deficit and, in turn, reduced the need for more borrowings/debt, thereby a step in the right direction to improve the country’s fiscal performance and debt management in a more sustainable manner in view of less/smaller scale lockdowns, going forward,” Ricafort said.

Finance Secretary Carlos Dominguez III earlier defended the uptick in the country’s programmed debt, which is expected to hit the internationally recommended threshold of 60% proportion of gross domestic product by 2022.

As of end-September this year, the amount of the country’s outstanding debt relative to the size of the economy has already breached the internationally-accepted debt threshold.

Data from the BTr showed that the country’s debt-to-gross domestic product (GDP) ratio grew to 63.1% as of end-September 2021 as the national government’s outstanding debt hit P11.917 trillion during the period.

This is the highest debt-to-GDP ratio in 16 years when the outstanding debt as percentage of the economy hit 65.7% in 2005.

The government’s domestic debt stood at P8.44 trillion, 0.3% lower than the end-October 2021’s level of P8.468 trillion “as a result of the net redemption of government securities.”

Foreign debt, meanwhile, amounted to P3.49 billion, down 0.4% from the P3.5-trillion posted as of end-October this year.

“The lower external debt for the month was attributed to the Philippine peso’s appreciation against the US dollar and other foreign currencies adjustments amounting to P11.64 billion and P4.05 billion, respectively,” the BTr said, noting that the peso appreciated against the greenback from P50.552:$1 as of end-October to P50.384:$1 as of end-November.

“This more than offset the net availment of external obligations amounting to P2.90 billion,” the Treasury said. — BM, GMA News