Philippines cuts national debt to P14.93 trillion

By Francis Allan L. Angelo

The Philippine government’s total outstanding debt decreased to P14.93 trillion at the end of March 2024, marking a reduction of P252.98 billion or 1.67% from the previous month, according to the latest data released.

The decrease was primarily driven by the net redemption of domestic government securities.

Domestic debt, constituting 68.86% of the total debt, was recorded at P10.28 trillion, showing a P299.21 billion or 2.83% decrease from February 2024.

The reduction in domestic debt is attributed to a P299.45 billion net redemption of government securities, which slightly offset the P0.24 billion effect of peso depreciation* on foreign currency domestic debt.

Since the beginning of the year, domestic debt has risen by P259.56 billion or 2.59%, with a year-on-year (YoY) expansion of P764.33 billion or 8.03%.

Conversely, external debt increased by P46.23 billion or 1.00% from the end of February to P4.65 trillion in March 2024.

This increase was largely due to the net availment of foreign loans totaling P44.01 billion and the impact of local currency depreciation, which increased the valuation of US dollar-denominated debt by P7.05 billion.

These factors more than compensated for a P4.83 billion reduction resulting from the appreciation of third currencies against the USD. Year-over-year, external debt grew by P304.50 billion or 7.01%.

National government (NG) guaranteed obligations also saw a modest increase of P1.11 billion or 0.3% from February 2024, totaling P346.04 billion at the end of March.

This rise was influenced by the net availment of domestic guarantees amounting to P2.48 billion and the effects of local currency depreciation against the USD on external guarantees by P0.25 billion.

These increases were partially offset by net repayments of external guarantees and the net appreciation on third-currency denominated guarantees, which reduced the obligations by P1.15 billion and P0.47 billion, respectively.

This shift in the national debt structure highlights the government’s ongoing financial maneuvers to manage its obligations amid fluctuating market conditions and currency valuations.

*The peso depreciated against the USD from P56.174 as of end-February 2024 to P56.260 as of end-March 2024