The national government’s outstanding debt slightly increased as of end-September by 2.2 percent to P15.89 trillion from the level recorded as of end-August, the Bureau of the Treasury (BTr) reported Wednesday.

Debt mostly comprised domestic loans with a 68.81 percent share, while foreign loans accounted for 31.19 percent.

BTr said the government’s foreign debt grew faster by 4.2 percent to P4.96 trillion after it issued global bonds worth P140.99 billion or $2.5 billion. As a result, outstanding external debt included net foreign borrowings worth P200.89 billion.

However, BTr said the government saved P2.43 billion in external debt due to peso appreciation against the US dollar.

Domestic loans increased at a slower pace by 1.3 percent to P10.94 trillion as the government issued more securities amounting to P145.11 billion.

Due to a stronger peso, P460 million was trimmed from the total domestic debt in terms of US dollar-denominated securities.

Domestic focus

“The strategic focus on local fundraising allows the government to limit external risk exposure to only 31.19 percent of its debt portfolio while enabling the development of the local bond market and providing Filipinos with quality investment vehicles to grow their savings,” BTr said in its report.

Finance Secretary Ralph Recto said the government is taking a gradual approach in reducing its debt-to-GDP (gross domestic product) ratio from 60.6 percent this year to 56 percent by 2028.

International Monetary Fund resident representative Ragnar Gudmundsson expects the Philippines to reduce its fiscal deficit from 6.1 percent last year to 5.6 percent this year due to government reforms on investments and taxes and more strategic spending on critical projects, including upskilling for human resources.

Recto projects government revenues from tax and non-tax sources as percentage of GDP to rise from 16.1 percent this year to 17 percent in 2028, which could lessen the government’s reliance on borrowings.

The finance chief said the revenue growth could be achieved through digitalization of tax processes and rationalization of tax policies, especially in the mining industry.

The government also expects over P7.25 billion in revenue collection from the recently enacted Value-Added Tax on Digital Services to include such tax on foreign digital service providers.