THE NATIONAL Government’s (NG) total debt reached P16.05 trillion at the conclusion of 2024 due to higher debt issuances and a robust dollar, as reported by the Bureau of the Treasury (BTr) on Tuesday.
Information from the Treasury indicated that the total debt increased by 9.8% or P1.44 trillion from P14.62 trillion at the conclusion of 2023.
On a month-to-month basis, the debt decreased by 0.2% from the unprecedented P16.09 trillion at the end of November.
“The year-end debt amount was closely aligned with the 2025 Budget of Expenditures and Sources of Financing estimates of P16.06 trillion, reflecting an insignificant variance of merely 0.03%,” stated the BTr.
The outstanding debt as a percentage of gross domestic product (GDP) rose to 60.7% at the end of 2024, compared to 60.1% during the previous year, according to the Treasury.
This figure remains slightly above the 60% threshold deemed manageable by multilateral financial institutions for developing nations.
It also marginally exceeded the government’s target of a 60.6% debt-to-GDP ratio for 2024, primarily due to the “lower-than-anticipated full-year real GDP growth rate of 5.6%,” the BTr noted.
“Nonetheless, the slight deviation from the planned debt demonstrates the NG’s efficient cash and debt management approaches, including its anticipatory handling of the volume and timing of its external debt issuances amid an unpredictable exchange rate landscape,” it added.
The Treasury attributed the annual rise in the debt stock to the “P1.31-trillion net issuance of debt instruments in accordance with the government’s deficit strategy, along with the P208.73-billion valuation effect from the strengthening of the US dollar.”
The Philippine peso concluded 2024 at P57.845 against the dollar, declining by P2.475 or 4.28% from its end-2023 value of P55.37.
Data from the BTr revealed that a significant portion, or 68.1%, of the overall debt stock originated from domestic sources, while 31.9% was derived from external sources.
Domestic debt increased by 9.1% to P10.93 trillion at the end of December compared to P10.02 trillion at the end of 2023. This was primarily comprised of government securities.
“The net issuance of domestic securities added P905.31 billion to the annual increase, while depreciation of the local currency boosted the peso valuation of outstanding foreign currency-denominated domestic securities by P7.18 billion,” the Treasury noted.
On a month-to-month basis, domestic borrowings rose by 0.1% from P10.92 trillion in November.
Conversely, foreign borrowings surged by 11.4% to P5.12 trillion at the end of 2024 from P4.6 trillion at the conclusion of 2023.
“The annual increase was primarily driven by P401.74 billion in net external debt availments, while the depreciation of the peso against the US dollar elevated external debt valuation by P201.55 billion,” the BTr stated.
“Adjustments for third currencies provided an P80.74 billion downward valuation offset.”
External debt comprised P2.68 trillion in global bonds and P2.44 trillion in loans.
Last year, the government secured $4.5 billion from the international market, issuing US dollar-denominated global bonds that raised $2 billion in May and $2.5 billion in August.
On a monthly basis, external debt declined by 0.9% from P5.17 trillion in November “as fluctuations in local and third currencies diminished the peso valuation of foreign currency-denominated debt by P66.6 billion and P30.68 billion, respectively, while net availments contributed an additional P48.87 billion.”
At the close of December, the NG’s total guaranteed obligations decreased by 0.8% to P346.66 billion from P349.44 billion in the previous year.
On a month-to-month comparison, guaranteed debt plummeted by 17.9% from P422.04 billion at the end of November.
“The month-to-month variation in the NG’s outstanding debt is consistent with the more robust peso exchange rate against the US dollar in December 2024, which appreciated by 0.775 or 1.3% month on month to conclude at P57.485 (from P58.62 in November 2024),” commented Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.
“The stronger peso effectively lowered the peso equivalent of the outstanding NG foreign debt when converted to pesos,” he added.
Mr. Ricafort suggested that the outstanding debt “could rise to new record levels” following the NG’s $3.3-billion global bond issuance last month.
The Philippines garnered $3.3 billion from the issuance of dollar and euro-denominated sustainability bonds in January.
The NG’s debt stock is anticipated to reach P17.35 trillion by the end of 2025.
The National Government intends to borrow P2.55 trillion this year — P2.04 trillion from the domestic market and P507.41 billion from external sources.
The government aims to reduce the debt-to-GDP ratio to 60.4% this year, 60.2% in 2026, and 56.3% in 2028. — A.R.A. Inosante
