The outstanding debt of the national government now swelled at P9.054 trillion as of end-June, as the country continues to increase borrowings for COVID-19 response and economic recovery, the Bureau of the Treasury (BTr) data showed.
The outstanding government debt as of end-June is 1.8% higher than the end-May, which is P8.890 trillion. The increase was “primarily due to the net issuance and availment of domestic and external financing.”
The BTr report said the end-June 2020 debt level is 15.1% higher compared with the end-June 2019 level of P7.868 trillion. “Compared with end-December 2019 level, the national government debt as of end-June widened by 17.1%.”
According to Rizal Commercial Banking Corp. chief economist Michael Ricafort, the outstanding debt of the government grew faster “as the government borrowed more locally and overseas to finance various COVID-19 programs.”
The 32% of the outstanding debt of P9.054 trillion was sourced externally while 65% were for domestic sources.
Meanwhile, external borrowings are now at P2.864 trillion, an 11.3% increase from P2.574 trillion year-on-year.
The government acquired program loans worth P216.30 billion, including P53.51 billion “in concessional loans from multilateral creditors in funding geared toward fighting COVID-19” and P11.09 billion for project loans.
Offshore bond issuances are now at P186.06 billion.
The national government’s external debt has increased by 10.0% or P260.33 billion since the beginning of 2020.
Also read: Debt of the Philippines now P8.18 trillion
Finance Secretary Carlos Dominguez earlier revealed the government plans to borrow up to 50 percent of the gross domestic product amid the coronavirus disease 2019 pandemic.
Dominguez explained that although the country’s debt-to-GDP ratio will now be higher than 39 percent in 2019, the target will still be “very affordable, mainly because the cost is very low.” The interest rate on the debts being taken out now “is quite historic lows,” he added.
“And one of the reasons is that our credit rating is very good,” the finance chief said.
“Of the total new issuances, P676.85 billion were in Treasury Bills, P387.86 billion were in Treasury Bonds, and P310.77 billion in Retail Treasury Bonds (RTBs) issued last February 2020,” the BTr said.
“This also includes the P300.00 billion short-term borrowing from the BSP through a repurchase agreement,” it said.