Govt debt to surpass P10T this year

The government’s outstanding debt is estimated to breach the P10-trillion mark by yearend as it plans to borrow more, data from the Department of Budget and Management (DBM) showed on Wednesday.

According to the department’s “2021 Budget of Expenditures and Sources of Financing” report, state obligations will reach P10.16 trillion by end-2020, up 31.42 percent from the P7.73-trillion liabilities at the end of last year.

Domestic debt is projected to reach P6.91 trillion — a 34.84-percent increase from P5.12 trillion at end-2019 — accounting for the bulk of outstanding obligations.

External liabilities will pick up by 24.67 percent to P3.24 trillion from P2.60 trillion last year.
Latest data showed that government obligations as of end-June reached P9.05 trillion, a 1.8-percent or P163-billion jump from P8.89 trillion in May.

Local debt grew to P6.19 trillion, up 2.6 percent from P6.03 trillion at end-May, while foreign liabilities rose by 0.3 percent to P2.86 trillion.

This as the government plans to borrow P3 trillion from domestic and external sources this year. The amount is 195 percent higher than 2019’s P1.01 trillion.

Gross domestic financing is programmed to reach P2.21 trillion while external borrowings are expected to hit P785.61 billion.

The Bureau of the Treasury would raise P48 billion by issuing Treasury bills and P1.67 trillion through fixed-rate Treasury bonds.

It also plans to borrow P500 billion from the Bangko Sentral ng Pilipinas though short-term loans. Of this amount, P300 billion were already disbursed to the bureau through its three-month repurchase agreement signed with the central bank in March.

In terms of foreign financing, the government plans to raise P466.81 billion through program loans, P29.07 billion through project loans and P289.73 billion through the issuance of bonds, as well as from other inflows.

In the first half of 2020, state borrowings climbed by 18.62 percent to P1.72 trillion from P1.45 trillion year-on-year.

For 2021, the government plans to borrow P3.02 trillion, which will bloat its outstanding debt to P11.98 trillion.

Earlier, the country’s economic managers voiced confidence that government debt would be kept within the 60-percent internationally recommended debt threshold by 2022.

Fitch Ratings had forecast the country’s general government debt ratio to climb to about 48 percent of gross domestic product this year, still below the projected peer median of 51.7 percent but above 2019’s 34.1 percent.

Source: TheManila Times