The government of the nation (NG).
According to the Bureau of the Treasury (BTr), the total amount of debt outstanding as of the end of August was a record high of P14.35 trillion. This was primarily caused by the peso weakening against the US dollar.
According to data from the BTr, the amount of unpaid debt rose slightly by 0.7% to P14.24 trillion at the end of July.
According to the BTr’s statement, there was a 0.7% increase, equivalent to P105.28 billion, compared to the previous month. This was mainly caused by the peso weakening from P54.834 to P56.651 against the US dollar during the specified time frame.
The amount of debt increased by 10.2% compared to the previous year, reaching P13.02 trillion by the end of August 2022.
From the beginning of the year until now, the total amount of debt has increased by 6.9%, reaching P13.42 trillion as of the end of December 2022.
68.2% of the NG’s debt portfolio came from domestic sources, with the remaining coming from foreign borrowings.
At the conclusion of August, the amount of domestic debt rose by 9.5% to P9.79 trillion compared to P8.94 trillion in the previous year.
But, there was a decrease of 0.2% in domestic borrowings from P9.81 trillion in July, because of significant retail bond repayments.
According to the BTr, there was a total of P229.29 billion in new domestic debt issued during the month. Additionally, P253.43 billion was redeemed, resulting in a net repayment of P24.14 billion.
The peso’s depreciation on domestic securities denominated in foreign currency resulted in an additional value of P2.9 billion, partially offsetting the impact.
The Treasury’s data revealed that the peso ended August at a rate of P56.651 against the US dollar, marking a 3.2% decrease from its end-July rate of P54.834.
From January to August, the domestic debt was primarily made up of government securities.
However, the amount of external debt reached P4.56 trillion by the end of August, showing an increase of 11.8% compared to P4.08 trillion in the previous year.
In comparison to the previous month, there was a 2.9% increase from P4.43 trillion at the end of July.
The decline of the Peso relative to the US dollar resulted in a positive adjustment of US dollar-denominated debt worth P146.85 billion in August, although only partially.ff
According to the BTr, the decrease in value of the third-currency debt component amounted to P22.11 billion.
The external debt stock for the reference month increased by P1.78 billion due to the net availment of foreign loans.
The total foreign debt was divided into P2.07 trillion in loans and P2.48 trillion in global bonds.
As of the end of August, the total guaranteed obligations of the NG increased by 0.9% to P366.58 billion from P363.4 billion at the end of July.
“The higher level of guaranteed debt is attributed to the net availment of domestic guarantees amounting to P2.44 billion and the P4.03-billion revaluation effect of peso depreciation on external guarantees surpassing the P3.29 billion in repayments,” the BTr added.
The amount of guaranteed debt decreased by 6.7% from P392.76 billion compared to the previous year.
According to Michael L. Ricafort, the Chief Economist of Rizal Commercial Banking Corp., the increase in outstanding debt by the end of August can be attributed to the depreciation of the peso.
The local currency came close to reaching P57 in the month, dropping to a low of P56.84 on Aug. 15.
According to Mr. Ricafort, increased inflation and interest rates were also contributing factors to the rise in borrowings.
He stated in an email that the costs have increased, causing government spending to increase as well.
th consecutive month that the
Consumer Price Index increased, rising by 5.3% in August. This marks the first time in seven months that the inflation rate has accelerated. Additionally, it is the 17th consecutive month of increase in the Consumer Price Index.th
For the second month in a row, inflation has exceeded the central bank’s target range of 2-4%.
In the first eight months of 2023, the average inflation rate was 6.6%, which is still higher than the BSP’s revised forecast of 5.8% for the entire year.
The BSP has increased the interest rate by a combined 425 basis points between May 2022 and March 2023. This has resulted in the key policy rate rising to 6.25%, the highest it has been in almost 16 years.
At the end of June, the debt of NG was 61% of its gross domestic product (GDP). This is still higher than the 60% limit deemed manageable by multilateral lenders for developing countries.
The goal of the government is to reduce the debt-to-GDP ratio to below 60%.ques
Luisa Maria Jaques predicts that 60% will be achieved by the year 2025.cinta C. Jocson