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The Philippine government’s debt reached a record P15.89 trillion at the end of September, as officials borrowed more locally and internationally to cover the budget deficit.
The Bureau of the Treasury reported on Wednesday that this marked a P343.11 billion increase from the previous month, a rise of 2.2 percent.
Compared with a year ago, the debt load also grew by 11.4 percent, or an additional P1.6-trillion borrowing in September.
READ: PH government debt rises to P15.89T in September
Domestic borrowings, which accounted for 68.81 percent of total debt, increased by 1.3 percent to P10.94 trillion in September from the previous month.
The increase in debt stock was driven by P145.11-billion net issuance of new government securities. This was slightly offset by a P460-million decrease in the value of US dollar-denominated securities, in turn due to the appreciation of the local currency against the greenback.
In September, the peso strengthened to P56.017 against the US dollar, from P56.179:$1 in the previous month.
Since the start of the year, the government—which has shied away from new tax measures for now—increased its debt stock by 8.7 percent, or P1.3 trillion.
Foreign debt up 4.2%
Compared with last year, domestic debt rose by 12.3 percent or P1.2 trillion at end-September.
Meanwhile, outstanding sovereign foreign debt amounted to P4.96 trillion, up by 4.2 percent from the level in August. This was primarily due to the P200.89-billion net foreign borrowings that came in, including the P140.99 billion raised from a US dollar bond issuance.
“Nevertheless, favorable foreign exchange adjustments contributed a substantial decrease of P2.43 billion in the overall external debt,” the BTr said.
External debt has increased by 7.8 percent or P358.71 billion since the start of the year.
“Coupled by currency depreciation, it would be more costly for the government to repay debt and would have to allocate more funds for debt servicing, reallocating such funds for equally pressing concerns such as social protection, poverty alleviation [and] infrastructure spending toward debt servicing,” John Paolo Rivera, senior research fellow at Philippine Institute of Development Studies, told the Inquirer.
Rivera noted that this could delay the growth of sectors that depend on these funds.
The government’s budget deficit widened by 404 percent to P273.3 billion in September from the past month.