The ratio of the government’s debt to the gross domestic product climbed to 36.4 percent as of end-June 2017 from 35.3 percent a year ago partly as a result of the weaker value of the peso against the US dollar, the Finance Department said of over the weekend.
The department’s Domestic Finance Group said in a report to Finance Secretary Carlos Dominguez III that as government expenditures picked up in 2017 resulting in a higher deficit, debt ratios reflected the increase in programmed borrowings. “The national government operations impact the most on the GG debt ratios,” it said.
Data showed that NG debt (net of the Bond Sinking Fund, or BSF) reached P5.8 trillion as of end-June 2017, up by 10.3 percent from P5.3 trillion in June 2016.
“Because the BSF can only invest in government securities, and these holdings are considered intra-sectoral and netted from total outstanding NG debt, the decline in BSF holdings, combined with peso depreciation, led to higher outstanding NG debt for the period,” the DFG said.
It said the local government units’ debt reached P85.8 billion, an increase of 9.2 percent from P78.6 billion posted in the same period in 2016.
Government securities held by social security institutions declined P59.7 billion, far outweighing LGU loans held by the Municipal Development Fund Office which was up by P3.5 billion, it said.
The total government debt was made up of 61 percent (P3.331 trillion) domestic borrowings and 41 percent (P2.166 trillion) foreign borrowings.
General government debt includes the outstanding debt of the national government, the Central Bank Board of Liquidators, social security institutions and LGUs, minus intra-sector debt holdings of government securities including those held by the BSF.
