PH debt balloons to record P15.35T as of end-May amid weak peso

The Philippines’ running sovereign debt stock has swelled to a new record-high as of end-May this year due to the impact of the peso depreciation and the government’s continued financing efforts, data released by the Bureau of the Treasury (BTr) on Thursday showed.

The national government’s outstanding debt stood at P15.347 trillion as of end-May, up 2.2% or P330.39 billion higher than end-April’s level of P15.017 trillion.

The Treasury attributed the debt level increase due to the impact of local currency depreciation on the valuation of foreign-currency denominated debt.

The BTr noted that the peso weakened against the US dollar from P57.583:$1 of end-April to P58.524:$1 of end-May.

The local unit has been trailing its 19-month low since last month, prompting the Bangko Sentral ng Pilipinas (BSP) to intervene in the foreign exchange market.

Broken down, the end-May debt stock was composed of 68.04% domestic debt and 31.96% was external debt.

In particular, domestic debt amounted to P10.442 trillion while foreign debt stood at P4.904 trillion.

The Treasury said the increase in domestic debt, at 1.3% month-on-month, resulted from the P131.66 billion net issuance of government securities and the P2.68 billion effect of peso depreciation on foreign-currency denominated domestic debt.

The BTr said the national government issued foreign currency-denominated securities in the domestic market, raising $1.11 billion (RDB 5-year), $1.26 billion (RDB 5.5-year), and $480 million (RDB 10-year).

Since the start of 2024, the government’s domestic debt grew by 4.2% or P424.91 billion while year-on-year growth was at 4.2% from P9.588 trillion as of end-May 2023.

External debt, on the other hand, grew by 4.2% month-on-month, while year-on-year increase stood at 7.4% from P4.565 trillion.

“For May, the increase in external debt can be attributed to P122.04 billion in net foreign loan availment and P76.94 billion in upward revaluation of US dollar- denominated debt,” the BTr said.

The Treasury said favorable third-currency movement provided a P2.94 billion downward revaluation effect. — RSJ, GMA Integrated News