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Strong peso softens rise in gov’t debt

THE strengthening of the peso against the US dollar in November helped soften the rise in government debt. Based on the Bireau of Treasury report on Tuesday, Jan. 3, the outstanding debt of the national government stood at P13.644 trillion at end-November, up by a marginal 0.02 percent from P13.641 trillion in October.

The slight increase was “the effect of local currency appreciation against the US dollar on foreign currency loans.” In November, the peso averaged 56.598 against the greenback, stronger than the 58.047 record in the previous month. However, the debt has increased by P1.92 trillion or 16.33 percent since end-December 2021.

Year-on-year, total debt also jumped 14 percent from P11.931 trillion in November 2021. Domestic debt amounted to P9.43 trillion, P72.73 billion or 0.78 percent higher compared to the end-October 2022 level.

During the month, the net issuance of government securities added P75.76 billion while peso appreciation trimmed P3.03 billion from the debt stock. Local debt comprises 69.1 percent of the total stock with a year-to-date increment of P1.26 trillion from its end-December 2021 level. Meanwhile, external debt amounted to P4.22 trillion, P69.58 billion or 1.62 percent lower than the end-October 2022 level due to the P106.98 billion impact of local currency appreciation and P13.38 billion net repayment.

“This was tempered by the net impact of third-currency fluctuations against the US dollar amounting to P50.78 billion,” the Treasury said. Foreign debt comprised 30.9 percent of the total portfolio. From end-December 2021 level, external debt has increased by P658.07 billion or 18.49 percent. Total national government guaranteed obligations increased by P1.47 billion or 0.38 percent month-onmonth to P388 billion as of end-November.

For November, the higher level of guaranteed debt was due to the net availment of domestic guarantees amounting to P1.03 billion and the net effect of currency fluctuations that increased the value of external guarantees by P0.44 billion. From the end-December 2021 level, total guaranteed debt is still lower by P35.92 billion or 8.47 percent. MANILA BULLETIN