Government debt hits P4.229 trillion in March

MANILA, Philippines – The National Government’s debt continued to pile up, increasing by 1.5 percent, or P65 billion, to P4.229 trillion as of end-March from the end-February level of P4.164 trillion, latest data from the Bureau of the Treasury (BTr) showed.

Of the P4.229 trillion total outstanding debt, the government owed P1.842 trillion to foreign creditors, accounting for 44 percent of the debt and P2.387 trillion, or 56 percent, to domestic creditors, data from the Treasury also showed.

At P4.229 trillion, theoretically, each of the 90.4 million Filipinos is indebted by P46,780.

Finance officials attributed the increase in domestic debt of P93.4 billion to the net issuance of government securities by the Treasury. The government borrows domestically through the issuance of Treasury bills and bonds through auctions or over-the-counter sale.

On the other hand, the National Government’s foreign debt decreased by P28.9 billion or 1.5 percent from the level as of end February 2009 as the government was able to make P43 billion in repayments.

“This was partially offset by the P10 billion net appreciation of the other currencies against the dollar, P4 billion depreciation of the peso against the dollar and P1 billion adjustment due to the late receipt of notice of availments,” the BTr said.

The peso closed at 48.4190 against the dollar at the end of March from 48.2360 against the greenback at the end of February, data from the Bangko Sentral ng Pilipinas (BSP) showed.

The contingent debt of the National Government, meanwhile, decreased to P553 billion as of end-March or P1 billion lower than the end-February level of P554 billion, data from the Treasury also showed.

The BTr attributed the decrease in the domestic contingent obligations of P4 billion to the net repayments made by the National Government.

“The increase in foreign contingent obligations of P3 billion was due to the combined effects of the P2 billion net repayments, P4 billion appreciation of major currencies against the dollar and P1 billion depreciation of the peso against the dollar,” the Treasury also reported.

The government relies heavily on foreign and domestic loans to pay maturing debts and finance its budgetary needs.

Through the years, fiscal authorities have been taking steps to fix the country’s fiscal position but external developments such as the global financial turmoil and declining revenues negatively affected these efforts.

In 2008, the National Government incurred a budget deficit of P68.1 billion which was below the P75 billion ceiling for the year but higher than the P12.4 billion deficit incurred in 2007.

For this year, the government hopes to contain the deficit at a revised program of P250 billion or 3.2 percent of gross domestic product (GDP), higher than the previous program of P199.2 billion or 2.5 percent of GDP.

Government economic managers revised the deficit ceiling for 2009 given the impact of the global financial turmoil on the Philippines. –Iris C. Gonzales, Philippine Star