The Philippines breached the P11 trillion debt level in May this year as loans made by the national government amid the pandemic continued to grow.

The Bureau of the Treasury reported on Monday, July 5, that the government’s outstanding financial obligations rose 24 percent to P11.071 trillion in May from P8.89 trillion in the same month last year.

Of the total amount outstanding, about 28 percent is owed to foreign creditors.

At end-May, domestic debt jumped 31 percent year-on-year to P7.915 trillion from P6.034 trillion, while foreign obligations hit P3.115 trillion, up 10 percent compared with P2.856 trillion a year before.

Month-on-month, the govnenmrmnent’s total debt stock increased slightly by 0.73 percent from P10.991 trillion in April.

According to the Treasury, the strong peso tempered further increases in debt between April and May.

External debt went down during the month by 0.74 percent from P3.179 trillion in April due to the P28.58 billion impact of local-currency appreciation against the US Dollar and the net repayment of foreign loans amounting to P220 million.

Meanwhile, domestic debt increased 1.3 percent from P7.812 trillion in April as a result of the net issuance of government securities.

Amid rising debt stock, the national government’s borrowings continued to expand.

Gross borrowings of the national government in the first five-month totaled P1.713 trillion, an increase of 13 percent compared with P1.509 trillion in the same period last year, the treasury reported

Domestic financing amounted to P1.459 trillion at end-May, higher by 26 percent from P1.152 trillion a year ago.

Foreign borrowings, meanwhile, declined 29 percent to P253 billion from P356.64 billion in the previous year.

The January to May borrowings account for 57 percent of the government’s P3 trillion program for the year to bridge the budget deficit.

Last week, President Duterte raised P3 billion, equivalent to P146 billion, through the sale of global bonds.

The latest a dual tranche offering marked the Philippines’ third commercial borrowing this year after the $2.5 billion sale of a triple-tranche euro-denominated bonds in April, and the $500 million three-year Japanese yen-denominated “Samurai” bonds in March.

Source: Manila Bulletin (