National Government Debt Drops to P15.55 Trillion in August 2024

The national government’s outstanding debt decreased to PHP 15.55 trillion by the end of August 2024, marking a 0.9% or PHP 139.79 billion drop compared to the previous month, according to data from the Bureau of the Treasury.

The decline was largely attributed to the appreciation of the peso against the US dollar, as well as net repayments of external debt. Of the total debt, 69.40% is in domestic securities, while 30.60% consists of external obligations.

The domestic debt rose slightly by 0.4% to PHP 10.79 trillion, increasing by PHP 38.46 billion due to the net issuance of government securities. This increase was partially offset by a downward revaluation of PHP 6.59 billion because of the peso’s stronger performance against the dollar.

Since December 2023, domestic debt has risen by 7.7%, or PHP 773.68 billion, reflecting the government’s ongoing reliance on domestic borrowing.

Meanwhile, external debt decreased significantly by 3.6% to PHP 4.76 trillion, shedding PHP 178.25 billion. The stronger peso accounted for a PHP 194.90 billion reduction, coupled with net repayments amounting to PHP 4.17 billion. However, the valuation of third currencies contributed to a PHP 20.82 billion increase.

Since the start of the year, external debt has grown by 3.5%, or PHP 160.25 billion, reflecting the persistent challenges in managing foreign obligations.

Guaranteed obligations also saw an increase of 5.6% to PHP 364.03 billion as of August, driven by new availments by the Power Sector Assets and Liabilities Management Corporation (PSALM) amounting to PHP 24.33 billion. The valuation of third-currency denominated debt added another PHP 1.38 billion to the total, although favorable peso movement trimmed PHP 6.47 billion from the guarantees.

This debt movement is aligned with the government’s efforts to balance its borrowing strategies amid a challenging global financial landscape. The rise in domestic debt issuance highlights the government’s intention to focus on local markets while reducing reliance on external obligations.

Economic experts note that managing the balance between domestic and external borrowing remains crucial as the country faces uncertainties in global markets. They also highlight the importance of peso appreciation in easing the government’s external debt burden.

As of August 2024, the peso appreciated against the US dollar from PHP 58.488 to PHP 56.179, significantly impacting the overall debt figures.