PH debt rises to P15.89 trillion as of end-September 2024

The Philippines' sovereign debt has ballooned to a fresh record-high of nearly P16 trillion as of end-September 2024, amid the government's continued fundraising initiatives to augment budgetary requirements.

Data released by the Bureau of the Treasury (BTr) on Wednesday showed that the national government's outstanding debt stood at P15.893 trillion during the period, up 2.2% from P15.55 trillion as of end-August 2024.

Year-on-year, the country's running sovereign debt pile grew by 11.4% from P14.268 trillion recorded as of end-September 2023.

Despite the debt level rise, the Treasury said that the latest debt figures were "manageable." 

As of the first half of 2024, the country’s debt-to-gross domestic product (GDP) ratio stood at 60.9%, just few percentage points above the internationally accepted comfortable threshold of 60%.

Debt-to-GDP ratio measures the amount of the national government's outstanding debt proportionate to the value of the economy during a specific period.

For this year, the Marcos administration is targeting to hit a debt-to-GDP ratio of 60.6%.

Meanwhile, the majority or 68.81% of the end-September 2024 debt level was sourced from the domestic market while the external risk exposure was at 31.19%.

In particular, domestic debt reached P10.94 trillion, up 1.3% month-on-month, "mainly driven by P145.11 billion net issuance of new government securities, which was slightly offset by a P460 million decrease in the value of US dollar-denominated securities due to the appreciation of the Philippine peso."

External debt, on the other hand, reached P4.96 trillion, up 4.2% from a month earlier.

The growth in the country's foreign debt was driven by the "P200.89 billion in net foreign borrowings, including P140.99 billion ($2.5 billion) in new US dollar bonds floatation to support general budgetary requirements."

"Nevertheless, favorable foreign exchange adjustments contributed a substantial decrease of P2.43 billion in the overall external debt," the Treasury said.

Finance Secretary Ralph Recto earlier said that the country's sovereign debt could balloon to as much as P20 trillion by the end of President Ferdinand "Bongbong" Marcos Jr.’s term in 2028.

Recto, nonetheless, said that while the nominal debt continues to rise, the country's economic growth would outpace the increase in debts.

He said the Philippine economy could reach a value of P37 trillion by 2028, versus a projected debt stock of P20 trillion.

Due to the aggressive borrowing spree to fund response, relief, and cash aid efforts amid the COVID-19 pandemic, the country’s debt-to-GDP grew to 60.5% in 2021, higher than the 54.6% level in 2020.

Prior to the COVID-19 pandemic, the Philippines' debt-to-GDP ratio had reached a record low of 39.6% in 2019. —KBK, GMA Integrated News