death to debt

National government debt rises to P4.1 trillion
by Jun Vallecera/BMirror/12.09.08

MORE than P76 billion worth of foreign and local debts were added to the national government’s (NG) debt burden in September this year, bringing the nine-month total to P4.1 trillion, the Bureau of Treasury reported on Tuesday.

The additional load raised the government’s debt as percentage of local output, or the gross domestic product (GDP) to 53.9 percent of GDP—significantly higher than the previous month’s 52.95 percent of GDP.

Treasury chief Roberto Tan said NG’s total debt outstanding aby JUn Vallecera/BMirrors of end-September stood at P4.1 trillion from only P4.024 trillion in August.

The 1.9 percent or P76-billion increase in NG debts during the month was traced to the continued sale of peso-debt papers on the domestic side, and to the impact of the weak peso and of so-called third currencies on the external side.

“Domestic debt increased by 0.4 percent or by P10 billion from the recorded end-August level arising from net issuances of government securities,” Tan said in a statement.

“The 4-percent increase in foreign debts of P66 billion was due to the P51-billion and P19-billion depreciation of the peso and third currencies against the US dollar, respectively,” Tan added.

Such increases were only partially made up for by net repayments totaling P4 billion, he quickly added.

Domestic debt, which includes the direct sale or assumption of debt notes and loans by government, totaled P2.369 trillion in September, up P10.2 billion or 0.4 percent higher than in August.

Foreign debt directly owed or assumed by the government, on the other hand, went up 4 percent, or the equivalent of P66.3 billion, during the period.

Contingent debt, which become direct NG obligations in the event of default by primary borrowers, retreated by 1.3 percent, or by P6.6 billion, to only P512.8 billion from P519.4 billion previously.