Gov’t debt soars...

PAGE 1 external debt went up by 3.2 percent or P133.27 billion.

Guaranteed obligations, meanwhile, shrank by P3.07 billion month over month to P384.12 billion.

The drop was attributed to the net repayment of domestic and external guarantees amounting to P0.01 billion and P1.52 billion, respectively.

“The net appreciation of the peso relative to the U.S. dollar further trimmed P2.99 billion,” the Treasury said.

“These were tempered by the net appreciation of third-currency denominated guarantees against the U.S. dollar amounting to P1.45 billion,” it added.

Guaranteed debt was down by 3.7 percent or P14.93 billion from December 2022.

China Banking Corp. chief economist Domini Velasquez said that “slow and offsetting growth rates in revenues and expenditures have kept deficit, and consequently resulting debt, in check.”

“However, to be prudent, the government should fast-track revenue-generating measures to aptly finance planned expenditures, particularly its infrastructure program, without resorting to a large accumulation of debt,” Velasquez said.

He said measures that the government could consider include “administrative efforts, digitization among revenue agencies, and planned revenue-enhancing legislation such as PIFITA, tax on single-use plastic, digital tax, revision of the motor vehicle users charge, and sweetened beverage tax.”

Rizal Commercial Banking Corp. chief economist Michael Ricafort said the debt figures reflect the need for the government to finance the relatively wider budget deficits in recent months.

Ricafort also cited reasons such as high inflation and interest rates that added to the government’s debt servicing costs, and still relatively weaker peso exchange rate against the U.S. dollar that increased the peso equivalent of the national government’s outstanding debts.

He said “a new record high for the outstanding national government in peso terms is still possible, in view of the upcoming U.S. dollar-denominated or euro-denominated retail bond issuance in May 2023.”

On the other hand, the debt could still rise, noting the government borrowings are “frontloaded again at the early part of 2023 to finance the budget deficit, starting with the scheduled foreign borrowings in 1H (first half of) 2023,” he said. n