Government Debt Hits Record High of P15.18 Trillion in February
The Philippine government’s outstanding debt reached a new high of P15.18 trillion in February, driven by increased local borrowings and higher interest rates.
Data from the Bureau of the Treasury (BTr) released on Wednesday showed that the country’s total liabilities rose by 2.63 percent month-on-month. Since the beginning of the year, debts have increased by P562.43 billion.
The increase in debt was primarily due to growth in domestic borrowings, which made up 69.68 percent of the total debt stock. The government owed P10.58 trillion to local creditors as of February, a 4.08 percent increase from the previous month.
A significant portion of the new liabilities came from the recent sale of Retail Treasury Bonds (RTBs), which generated P584.86 billion for the government. Despite a slight decrease in external debts to P4.60 trillion, the peso’s strength offset the net availment of foreign loans.
The Marcos administration plans to borrow a total of P2.46 trillion from both domestic and foreign sources in 2024 to address the projected budget deficit of P1.4 trillion. Finance Secretary Ralph Recto emphasized the government’s commitment to prudent debt management, with a borrowing mix favoring domestic sources.
Recto, who assumed the finance portfolio in January, aims to improve the country’s fiscal health through better revenue collection rather than introducing new taxes. Economists like Ruben Carlo Asuncion suggest that focusing on economic growth is crucial in reducing the budget gap.
Despite the challenges posed by the high interest rate environment, the government remains steadfast in its debt consolidation and deficit management strategies.
