PH debt breaches ₱10T in October with record loan from central bank

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Metro Manila (CNN Philippines, December 4) — The country's debt shot past ₱10 trillion as of October, reflecting additional loans secured months into the COVID-19 pandemic.

The Bureau of the Treasury announced Friday that the debt stock reached ₱10.03 trillion, adding ₱658.81 billion payables from September. The outstanding debt is also 26.8% higher than the ₱7.91 trillion dues incurred as of October 2019.

Minus debt payments, the state incurred an additional ₱2.3 trillion burden so far this year, up 29.7% from the end-2019 tally.

Locally sourced debt reached ₱7.08 trillion to account for 70% of the outstanding dues. This is a tenth higher from September's level as it now included the bigger ₱540 billion short-term credit from the Bangko Sentral ng Pilipinas.

The government also floated an additional ₱98.99 billion in Treasury bills and bonds in October, data showed.

The rest of the borrowed funds came from foreign lenders at ₱2.95 trillion. New loans worth some ₱19 billion were added to the pile, although the stronger peso-dollar exchange rate partly offset this increase.

Broken down, ₱1.66 trillion is owed to foreigners who bought debt papers issued by the Treasury, while ₱1.29 trillion worth of loans remain payable.

Despite the rising debt, the government scaled down payment guarantees by 6% to ₱447.8 billion. New loans secured this year padded public coffers for emergency COVID-19 response, as well as other state projects after tax and other revenue collections plunged at the height of lockdowns.

The Department of Finance earlier said it will keep government debt at less than half the size of the local economy, as it seeks to boost the state's cash supply to implement COVID-19 response measures quickly.

Government debt is seen to hit ₱10.16 trillion by December, data from the Budget Department showed.