PH Debt Rises To ₱13.6T In November

The Bureau of the Treasury (BTr) said the Philippines’ total outstanding debt reached a new record high of ₱13.64 trillion at the end of November 2022. However, monthly increases slowed as the peso increased due to a lull in borrowings from abroad and fewer inflows from domestic lenders.

The BTr said the national government’s debt stock increased in November by just 0.2% or ₱3.15 billion due to peso appreciation trimming down obligations denominated in US dollars. But total debt increased by 16.3% or ₱1.92 trillion since December 2021.

“For November, the net issuance of government securities added ₱75.76 billion while peso appreciation trimmed ₱3.03 billion from the [domestic] debt stock,” the BTr said.

Expansion is set to pick up in the coming months as state managers aim for the foreign currency debt market to fund expenses that exceed revenues.

The latest update on the fiscal program showed that the national government expects a budget deficit of ₱1.47 trillion in 2023, less than the planned ₱1.5 trillion deficit in 2022.

Meanwhile, BTr said foreign debt decreased by 1.6% or ₱69.6 billion “due to the ₱106.98 billion impact of the local currency appreciation and the ₱13.38 billion net repayment.”

This helped new debt inflows exceed the external debt stock, along with the repayment of loans. Although, borrowings from abroad increased by 18.49% or ₱658.07 billion.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said the monthly change in total debt stock was almost flat with the lack of new debt issuances and lower government borrowings in November 2022.

“For the coming months, the national government outstanding debt could still post new record highs in peso terms amid plans to issue new US dollar-denominated bonds, as well as US dollar-denominated retail bonds in the first quarter of 2023 worth about $3 billion, on top of the scheduled issuances of peso-dominated government securities and possible new retail treasury bond (RTB) issuance,” Ricafort said.

The Development Budget Coordination Committee predicts that the peso-dollar exchange rate to range from ₱54-55 per dollar in 2020 and weaken to ₱55-59 per dollar in 2023.

This assumption was based on how “the peso continues to depreciate due to heightened global uncertainties and aggressive monetary policy tightening of the US Federal Reserve,” the DBCC said.

Source: Inquirer.net