Stronger peso trims NG debt

Of the overall stock, 67.10 percent were sourced domestically and only 32.90 percent were borrowed from external sources.

Although bulk of the national government’s (NG) debts are denominated in local currency, it gained strength in October when the exchange rate averaged P51.504 per dollar from P52.105 the previous September, the Bureau of the Treasury (BTr) said on Friday.

Data from the BTr show NG outstanding debt as of end-October totaled P7.906 trillion, P1.61 billion or 0.02 percent lower than in September when this totaled P7.907 trillion level.

According to the Treasury, this development may be attributed to the “revaluation effect” resulting from the appreciation of peso versus the mighty US dollar.

Of the overall stock, 67.10 percent were sourced domestically and only 32.90 percent were borrowed from external sources.

Domestic debt in October was slightly higher at P5.30 trillion versus only P5.25 trillion a month earlier.

On the other hand, foreign borrowings dipped 1.83 percent to P2.60 trillion versus the posted P2.64 trillion in the same comparable period.

“The increase resulted from a P47.53 billion net issuance of government securities, which was partly offset by a P0.52 billion reduction in the local currency valuation of onshore dollar bonds caused by peso appreciation,” the Treasury said.

“(The lower external debt for the month), can be attributed to local currency appreciation which trimmed the valuation of US dollar-denominated debt by P52.49 billion, as well as due to net repayments of loans amounting to P0.63 billion,” it added.

Total NG guaranteed obligations or debt contracted by public entities that become direct NG obligations at default, contracted 1.4 percent month-on-month to P477.65 billion.