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Government Debt Falls After Record Highs

The Bureau of the Treasury announced on Thursday that the national government’s outstanding debt decreased to P14.93 trillion in March, ending a five-month run of record highs.

According to Treasury figures, even with this decline from February’s P15.18 trillion, it was still more than the P13.9 trillion from the prior year.

The net redemption of domestic government securities was the primary cause of the decrease.

Domestic borrowings made up the majority of the total debt at 68.86 percent, amounting to P10.28 trillion. This was 2.83 percent lower than February’s P10.58 trillion.

“The decrease was due to the P299.45 billion net redemption of government securities, offsetting the P0.24 billion impact of peso depreciation on foreign currency domestic debt,” stated the Treasury.

Domestic debt has increased by P259.56 billion, or 2.59 percent, since the beginning of the year, and by 8.03 percent or P764.22 billion compared to the previous year.

External debt, comprising 31.14 percent of the total outstanding debt, reached P4.65 trillion by the end of March, a 1.0 percent increase from the previous month’s P4.6 billion.

This rise was attributed to “net availment of foreign loans amounting to P44.01 billion, as well as local currency depreciation, which added to the valuation of US dollar-denominated debt by P7.05 billion.”

Compared to December 2023, external debt increased by P49.89 billion, or 1.09 percent, and year on year by P304.50 billion, or 7.01 percent.

Guaranteed obligations increased by 0.3 percent, or P1.11 billion, to P346.04 billion by the end of March from the previous month.

This was due to the net availment of domestic guarantees amounting to P2.48 billion and the P250 million effect of local currency depreciation on external guarantees.

“The net repayment of external guarantees offset P1.15 billion, while the net appreciation on third-currency-denominated guarantees trimmed P0.47 billion,” explained the Treasury.

Guaranteed debt decreased by 1.0 percent, or P3.40 billion, compared to December, and by 9.9 percent, or P38.08 billion, year on year.

The Finance Department announced an increase in planned government borrowings to P2.57 trillion this year, with a higher deficit projection of P1.48 trillion. The borrowing mix remains at 75:25 in favor of domestic sources.

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