MANILA, Philippines — The government’s debt reached a new record high of P14.51 trillion in November 2023, increasing by P27.92 billion from the previous month.
This rise was influenced by higher borrowing costs and increased inflation, leading to a significant increase in the Marcos administration’s expenses. The Bureau of the Treasury disclosed these findings on Wednesday.
Year-to-date, obligations piled up by 8.12 percent or P1.09 trillion. Documents from the budget department showed that the Marcos administration expects the total debt load to have ended 2023 at P14.62 trillion.
In a statement, the Treasury said much of the increase in outstanding liabilities in November was due to “net issuance of domestic securities”—meaning that the government borrowed more onshore than it paid during the month.
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Data showed local borrowings, which accounted for 69.09 percent of the entire pile, inched up by 1.23 percent or P122.07 billion to P10.02 trillion.
In November, the state borrowed P171.09 billion onshore through its regular sale of debt securities such as Treasury bonds and Treasury bills, and repaid the P45.14 billion it owed to local creditors. But the Treasury said a stronger peso tempered the value of foreign currency-denominated domestic securities, which partially offset the increase in local borrowings by P3.87 billion.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said local obligations rose as rising interest rates made debt servicing more costly for the government. This, while stubbornly high inflation called for more spending on programs meant to help the poor, thereby widening the budget deficit.
Since the beginning of 2023, figures showed domestic debt had accumulated by P816.02 billion.
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Meanwhile, external borrowings sagged by 2.06 percent or P94.15 billion month-on-month to P4.48 trillion as of end-November. The Treasury said foreign debts fattened by P273.84 billion year-to-date.
External liabilities fell after the government settled P1.08 billion more than it borrowed offshore, while the peso’s appreciation against the US dollar cut foreign debts by P109.37 billion.
“Continued budget deficits, though narrower from year ago levels, could still lead to additional borrowings,” ” Ricafort said in an emailed commentary.