National gov't debt P4.017 trillion as of end-May

The country's debt stock breached the P4 trillion-level in May due to a weak peso during that period amid interest rate jitters in the world market, the Bureau of Treasury (BTr) reported on Thursday. In a report to Finance Secretary Margarito Teves, National Treasury Omar Cruz said the debt of the national government went up by P21 billion to P4.017 trillion in May from P3.966 trillion as of April due to the depreciation of the peso and other third currencies against the green back. Cruz said the country's debt stock was also P128.35 billion or 3.3 percent higher than the P3.888 trillion debt level in May last year. About 54 percent or P2.172 trillion of the total debt came from domestic creditors while 46 percent or P1.845 trillion came from foreign sources. Data showed foreign debt rose 2.2 percent or by P39.398 billion to P1.845 trillion as of end May from P1.805 trillion as of end-April. "The increase in foreign debt was brought about by the P12 billion revaluation of the third currencies against the US dollar and the P30 billion depreciation of the peso against the dollar," Cruz told Teves. He explained that the peso depreciated to P52.60 to $1 as of end May from P51.75 to $1 as of end April. Cruz said the country's domestic debt was steady at P2.172 trillion as of end May versus P2.19 trillion at end of April. Meanwhile, the treasury likewise reported that the government's contingent debt rose P11 billion to P591.91 billion in May from P580.94 billion in April. The contingent debt is composed of guarantees extended by the national government and not included in the country’s total debt stock. The increase was attributed to the P9 billion depreciation of the peso against the US dollar and the P5 billion net fluctuation of the third currency against the US dollar. The increase was cushioned by the P3 billion net repayments. The Philippines, the biggest issuer of bonds outside Japan, relies heavily on foreign and domestic borrowings to finance its yawning budget deficit. The country’s debt stock rose 2.02 percent to P3.888 trillion or 72 percent of gross domestic product (GDP) last year from P3.811 trillion or 79 percent of GDP in 2004. With the full implementation of the new VAT law, the government expects to trim its budget deficit to P125 billion or 2.1 percent of GDP this year from P146.5 billion or 2.7 percent of GDP last year. - GMANews.TV