PH debt hits record P13.91T

by Niña Myka PauliNe arceo ManilaTimes.net

CONTINUED borrowings and a weaker peso saw the national government’s outstanding debt rise to a new record high of P13.91 trillion in April, the Bureau of the Treasury reported on Wednesday, May 31.

For the month alone, P54.24 billion was added to total outstanding debt due to the “net issuance of external debt and local currency depreciation against the U.S. dollar,” the Treasury said in a statement.

Local borrowings comprised the bulk, or 68.0 percent, of the debt total. At P9.46 trillion, it was P55.32 billion lower compared to the end-March level due to the net redemption of securities amounting to P57.79 billion.

“This was slightly offset by the P2.47-billion effect on onshore foreign currency-denominated securities caused by peso depreciation against the U.S. dollar,” the Treasury added.

Reckoned from the end of last year, P249.45 billion has been added to domestic debt.

External debt — 32 percent of total outstanding debt — ballooned to P4.45 trillion, P109.56 billion higher than the previous month.

This was due to a “P27.98billion net availment of external loans and P94.28-billion impact of local-currency depreciation against the U.S. dollar,” the Treasury said.

“On the other hand, thirdcurrency adjustments against the U.S. dollar trimmed P12.30 billion from the peso value of foreign currency debt,” it added. Since the start of the year, external debt has grown by P242.83 billion.

Guaranteed obligations, meanwhile, plunged by P3.42 billion to P380.69 billion as of end-April.

The drop was attributed to the net repayment of domestic guarantees amounting to P5.51 billion and third-currency adjustments amounting to P1.87 billion.

“These were tempered by the impact of local currency depreciation amounting to P3.95 billion,” the Treasury said.

Guaranteed debt as of endApril was P18.35 billion lower from the end of last year.

Sought for comment, Rizal Commercial Banking Corp. chief economist Michael Ricafort said the latest borrowings could reflect the need to finance wider budget deficits.

“For the coming months, a new record high for the outstanding national government [debt] in peso terms is still possible, in view of the upcoming U.S. dollar-denominated or euro-denominated retail bond issuance in the third quarter of 2023,” he added.

China Banking Corp. chief economist Domini Velasquez said government debt could continue to rise but at a slower pace given a spending slowdown.

“If we look at the fiscal performance of the national government, the deficit has continued to outperform the program mainly because spending is lower,” she said.

“This is challenging ... because we still need government spending to support economic growth.”

Velasquez also noted that interest rates were also moving in the government’s favor as these have come down from last year’s highs and will likely continue to do so.

ING Bank Manila senior economist Nicholas Antonio Mapa, meanwhile, said fiscal authorities “will attempt to help foster faster economic growth to ensure the more important metric of debt to GDP (gross domestic product) remains on a downward trajectory.” n

Senate adjourns, okays 8 Marcos priority bills

THE Senate adjourned sine die on Wednesday, May 31 highlighted by its approval of eight priority measures of the administration and the enactment of six bills into law.

In his closing remarks, Senate President Juan Miguel Zubiri called the First Regular Session of the 19th Congress a “success”” for the Senate, highlighting not only the quantity but also the quality of the measures that have been approved by the chamber.

The Senate produced a total of six measures enacted into law – four national and two local laws. Twenty-two bills are now also for the President’s signature – seven of them national, fifteen local. Two national bills are pending at the bicameral conference committee, and six more national bills have been approved on third reading.

“A highlight among our accomplishments is our approval of eight of the priority measures of the administration,” the senate president said.

Three of these measures have been passed into law -- the SIM Registration Act, the Act Postponing the Barangay Elections, and the AFP Fixed Term Law.

Meanwhile, the measure on the Condonation of Unpaid Amortization and Interests on Loans of Agrarian Reform Beneficiaries, the Regional Specialty Centers Act, the Extension of the Estate Tax Amnesty Act, and the Maharlika Investment Fund Act are presently awaiting the signature of