Gov’t debt stands at P5.948 trillion in first half of 2016

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Gov’t debt stands at P5.948 trillion in first half of 2016
Foreign exchange fluctuations and new domestic borrowings push up the debt stock in June, but total debt has decreased slightly from the start of the year

MANILA, Philippines – The country’s national debt increased slightly in the first half of the year due to foreign exchange (forex) market fluctuations and new domestic borrowings.

The national government’s total outstanding debt stock as of the end of June stood at P5.948 trillion, said the Department of Finance (DOF) in a statement on Monday, August 8.

This followed the debt stock increasing by P62.41 billion for June from the end-May level of P5.886 trillion, as a result of forex adjustments and domestic net issuance, said National Treasurer Roberto Tan.

Tan noted, however, that the debt stock is still lower, albeit very slightly, from its end-2015 level of P5.954 trillion.

Domestic debt

Total domestic debt amounted to P3.828 trillion in June, an increase of P31.25 billion or 0.8% from the May level of P3.797 trillion. Domestic debt accounted for 64.4% of outstanding liabilities.

The net issuance of government securities in June and the depreciation of the peso against the US dollar contributed to the growth in domestic obligations equivalent to P31.12 billion and P0.13 billion, respectively, based on Bureau of Treasury (BTr) data.

As of end-June, the government’s domestic debt level has fallen by 1.4% or P55.88 billion since the beginning of the year.

External debt

The government’s external debt, or money owed to foreign sources, stood at P2.120 trillion. This is 1.5% or P31.15 billion higher compared to the end-May level of P2.088 trillion.

The BTr blamed the increase on the combined effect of currency fluctuations on the US dollar and third currency-denominated debt that raised the peso value of outstanding obligations by P12.65 billion and P21.64 billion, respectively.

These far outpaced net repayments amounting to P3.14 billion for the month. To date, the external debt stock has increased by 2.4% or P49.35 billion over the last 6 months.

The government’s guaranteed debt, meanwhile, was adjusted to P563.28 billion as of June from its previous level of P448.20 billion in May.

The national government managed to increase spending for the 1st half of 2016, resulting in the budget deficit growing by 14%. –

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