Metro Manila (CNN Philippines, September 30) — The Philippine government’s debt inched up to a new high of ₱11.64 trillion in August, jacked up by more borrowings from the domestic market.
Data from the Bureau of the Treasury released Thursday showed end-August outstanding debt went up to ₱11.64 trillion from ₱11.61 trillion in July, as the Philippine government continued to secure funds to combat the latest pandemic wave.
For the first eight months, total debt rose by 18.9% from end-2020.
The bulk, or ₱8.22 trillion, of the outstanding obligations was raised from local sources — also ₱100.70 billion or 1.2% higher against figures from July.
Domestic debt increased by 22.79% from the beginning of 2021.
Loans with foreign sources, meanwhile, fell to ₱3.42 trillion, 2% lower from end-July’s level.
“The lower figure was due to the net repayment of foreign loans amounting to ₱34.22 billion,” the Treasury said.
“The impact of both local- and third-currency fluctuations against the US dollar further lowered the peso value of external obligations by ₱32.04 billion and ₱2.39 billion, respectively,” it added.
However, foreign debt already jumped 10.4% from end-December.
Commenting on the rise in national debt, Rizal Commercial Banking Corp. chief economist Michael Ricafort said in an email that this could be attributed to the two-week hard lockdown in Metro Manila and the subsequent MECQ, which reduced business activity, thereby affecting tax revenue collection.
“Thus, lockdowns tend to widen the country’s budget deficit that in turn, increase the need for the government to borrow more to finance the budget deficit, and adds to the country’s debt stock,” he added.
Ricafort said embracing granular lockdowns coupled with the government’s accelerated vaccination drive could justify the further reopening of the economy, which would in turn increase revenue collection. With less spending on COVID-19 programs, he said there would be a reduction in new government borrowings.
