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Philippines ends 2021 with P11.73T gov't debt, debt-to-GDP ratio at 60.5% —Treasury data

The Philippine government’s running debt stock saw a decline as of end-December 2021, but the full-year debt levels relative to the size of the economy has already reached the manageable threshold, data released Tuesday by the Bureau of the Treasury (BTr) shows.

Treasury data showed that the end-December 2021 national government outstanding debt stood at P11.73 trillion, down 1.7% from the P11.93 trillion debt balance as of end-November 2021.

The slight decrease in the debt stock was due to the net redemption of domestic securities.

Year-on-year, the total outstanding debt grew 1.7% or by P1.93 trillion from P9.8 trillion as of end-December 2020.

The government’s total debt is composed mostly of domestic borrowings at 69.7%, while the remaining balance of 30.3% was sourced externally.

The BTr said the debt-to-gross domestic product (GDP) ratio was registered at 60.5%, higher than the 54.6% level a year earlier

The Treasury said the full-year debt-to-GDP level is still within the accepted sustainable threshold as the economy continues to recover from the effects of the COVID-19 pandemic.

Finance Secretary Carlos Dominguez III earlier defended the uptick in the country’s programmed debt, which is expected to hit the internationally recommended threshold of 60% proportion of gross domestic product by 2022.

Domestic debt amounted to P8.17 trillion, which is P271.09 billion or 3.2% lower compared to the end-November 2021 level as the repayment of the P540.00 billion provisional advance from the BSP outpaced the net issuance of government securities, according to the BTr.

Nevertheless, it said that domestic debt grew by P1.48 trillion or 22.0% for the year in line with the domestic borrowing program which favors domestic issuance to mitigate foreign exchange risk and support local capital market development.

External debt, meanwhile, stood at P3.56 trillion, up 1.9% or higher by P67.81 billion compared to the end-November 2021 level.

“For December, the increment in external debt was attributed to the impact of peso depreciation against the US dollar amounting to P40.87 billion and the net availment of external obligations amounting to P33.83 billion,” the Treasury said, noting that the the local currency weakened against the greenback from P50.384:$1 as of end-November 2021 to P50.974:$1 as of end-December 2021.

“These more than offset the effects of adjustments in other foreign currencies amounting to P6.89 billion,” it said.

From the start of the year, the BTr said external debt has increased by P457.82 billion or 14.8%, of which 6.6% can be attributed to peso depreciation. —KBK, GMA News