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(Updated) Philippine debt rises as peso weakens


(Updated) MANILA, Philippines - Debts owed by the national government, its agencies, and departments have gone up in December last year after the peso proved weaker than expected. The national government incurred obligations worth P4.221 trillion as of end-December 2008, nearly 14 percent more than December 2007’s P3.712 trillion, latest data from the Bureau of Treasury (BTr) said. Higher government obligations were incurred due to the weaker peso whose actual average exchange rate last year reached P47.52 per dollar, Bangko Sentral ng Pilipinas (BSP) data said. The Philippines’ economic managers expected the peso to stabilize at P45 to the US dollar last year. As a result, the foreign debt component of the national government’s obligations was aggravated, expanding by nearly 20 to P1.806 trillion during the period. In December 2007, the national government’s foreign debts was at P1.511 trillion. The foreign debt increase was also brought about by a 12.8 percent hike in the sale of foreign currency denominated IOUs totaling P1.012 trillion. Bulk of these issuances were US dollar bonds and notes worth P910.8 billion, euro bonds worth P76 billion, and Japanese yen bonds worth P26.1 billion. Meanwhile, for the last month of 2008, Manila borrowed P2.414 trillion from local sources, 9.7 percent higher than P2.201 trillion reported in the same month of 2007. Despite the weaker peso, the government’s current debt levels were still close to what had been previously planned by Manila’s economic managers. Current government debt is equal to 56.3 percent of local output or the gross domestic product (GDP), one of the highest in the region, Finance undersecretary Gil S. Beltran said. - GMANews.TV
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