The country's outstanding debt declined month-on-month to P14.93 trillion last March as the government paid its domestic obligations, the Bureau of Treasury (BTr) said on Thursday.

The latest data from the state-run Treasury Bureau showed that the country's debt decreased by P252.98 billion or 1.67 percent from P15.18 trillion last February.

On a year-on-year basis, the government's debt slightly grew by 7.7 percent from P13.86 trillion last March 2023.

Of the latest total debt stock, 68.86 percent was domestic debt while 31.14 percent was foreign debt.

The end-March domestic debt level of P10.28 trillion is P299.21 billion or 2.83 percent lower compared with the end-February 2024 level.

The decline resulted from the P299.45 billion net redemption of government securities offsetting the P0.24 billion effect of peso depreciation1 on foreign currency domestic debt.

Since the beginning of the year, domestic debt has increased by P259.56 billion or 2.59 percent, while year-on-year expansion is P764.33 billion or 8.03 percent.

Foreign debt increased

While domestic debt declined, data from the Treasury Bureau showed that foreign debt slightly grew as the government borrowed more from foreign lenders and as the peso depreciated against the US dollar. 

The country's external debt worth P4.65 trillion as of March was P46.23 billion or 1.00 percent higher than P4.60 billion last February.

"The increase resulted from the net availment of foreign loans amounting to P44.01 billion, as well as local currency depreciation which added to the valuation of US dollar (USD)-denominated debt by P7.05 billion," BTr said.

"This more than offset the P4.83 billion impact of the appreciation in third currencies against the USD. External debt has increased by P49.89 billion or 1.09 percent from its end-December 2023 level and by P304.50 billion or 7.01% on a (year-on-year) basis," BTr added.

In an emailed commentary, Rizal Commercial Banking Corp. chief economist Michael Ricafort said the country's outstanding debt could be attributed to continued budget deficits on the back of inflation that also bloated government expenditures, higher interest rates, and weaker peso exchange rate vs. the U.S. in recent years.

"For the coming months, the national government's outstanding debts could still post new record highs in view of the national government's upcoming borrowings such as the planned $5 billion global/ROP bonds," Ricafort said.