Read this in The Manila Times digital edition.
THE country’s total outstanding debt climbed to P13.02 trillion as of last August, the Bureau of Treasury reported Friday.
The figure is P133.64 billion or one percent higher than the record P12.89 trillion posted in July.
The bureau attributed the increase to the issuance of domestic securities and currency adjustments.
The government’s debt has risen by P1.29 trillion or 11 percent since December 2021, of which 68.7 percent were domestic borrowings.
The government’s domestic debt ran to P8.94 trillion, higher by P111.21 billion (1.3 percent) than the July level.
The August increase in domestic debt resulted from the issuance of P109.43 billion in government securities and the P1.78 billion impact of the peso’s depreciation against the US dollar.
The domestic debt portfolio has gone up by P772.98 billion since the beginning of the year, the bureau said.
The increase reflected the continued reliance on domestic borrowing to soften the impact of currency fluctuations.
Michael Ricafort, the chief economist of the Rizal Commercial Banking Corp., told The Manila Times in a Viber message that higher global interest rates would push up the government’s interest rate payments and could lead to more borrowing.
Ricafort said tax reform and other fiscal measures, along with faster economic growth, will help ease the government’s debt-to-GDP ratio to below the international threshold of 60 percent in the coming years.
Also on Friday, the Bangko Sentral ng Pilipinas (BSP) announced that the annual inflation rate for September will remain within the 6.6 percent and 7.4 percent range.
In a statement, the BSP said inflation in September is likely to be driven by higher electricity rates and prices of essential food commodities, along with the peso’s depreciation.
It said a drop in local fuel prices and lower meat prices could help ease inflation.
The BSP said it will “continue to monitor very closely emerging price developments to enable timely intervention to prevent the further broadening of price pressures, in accordance with the BSP’s price stability mandate.”
Ricafort said a weaker peso and higher electricity rates could be “major catalysts” for inflation.
The World Economic Forum has predicted that inflation would remain high not only in the Philippines but worldwide.
“With inflation soaring and real wages falling, the global cost of living crisis is hitting the most vulnerable hardest,” says Saadia Zahidi, managing director at the World Economic Forum.
“As policymakers aim to control inflation while minimizing the impact on growth, they will need to ensure specific support to those who need it most. The stakes could not be higher,” Zahidi said.
On a more positive note, the Treasury bureau said the government’s budget deficit dropped by 40.43 percent, to P72 billion, in August from P121 billion a year ago.
It said government spending decreased from P958 billion to P833 billion (13.06 percent) between January and August this year. This is P125.2 billion lower than the 2021 figure.
Government expenses grew by 6.39 percent year over year in August, to P404.5 billion from P380.2 billion.
But revenue growth outpaced expenses by P73.2 billion, to P332.4 billion from P259.3 billion last year.
The bureau said 93 percent (P308.4 billion) of the revenue came from tax collection and the remaining 7 percent (P24.0 billion) were non-tax collections.
The government’s collection of P2.4 trillion in August also surpassed the previous year’s performance by 18.09 percent (P362.9 billion). It already made up 72 percent of the P3.3 trillion targeted for the year.
The Bureau of Internal Revenue (BIR) brought in P228.9 billion for the month, or P42.9 billion more than the collections a year ago.
The BIR’s year-to-date total uptake of P1.6 trillion was also higher by 12.25 percent (P170.2 billion) than the previous year’s P1.4 trillion.
The Bureau of Customs (BoC) recorded its highest year-on-year growth of 47.84 percent in August, with revenue of P78.9 billion.
The BoC’s collection as of end-August stood at P559.2 billion, a 35.64 percent (P146.9 billion) increase over last year.
Tiziana Celine Piatos