RP debts rise after selling securities to fund spending

MANILA, Philippines - The Philippine government’s outstanding debts increased in end-March this year after selling more securities, the proceeds of which were used to bankroll faster and accelerated spending to ward off the effects of the global economic slowdown. Money raised from the sale of government securities also helped narrow a burgeoning budget deficit. The Philippines’ total debts reached P4.229 trillion in March, 8.9 percent higher than its obligations during the same month last year, the Bureau of the Treasury (BTR) said. Besides the sale of securities – which are later redeemed by government plus interest at a future date – the Philippines’ total obligations rose after it incurred higher foreign borrowing. During the same month, total foreign loans climbed by 15.5 percent year on year to P1.842 trillion. Of this amount, P783.6 billion were direct loans, P714.5 billion were availed by agencies, and P69.1 billion were relent to government-owned and controlled corporations. Domestic loans also rose but only at single-digit levels. The government incurred P2.387 trillion in borrowing from local sources, the BTR said. Of this amount, P2.384.7 trillion were direct loans, P2.377.5 came from government securities, while P7.2 billion were availed by agencies. Some P2.3 billion were assumed loans. Total contingent debt – which the government is required to pay if an agency fail to remit payments – also rose by 6.4 percent to P552.8 billion. Domestic contingent debt rose to P89 billion, 22.1 percent higher than figures reported during March last year. The rise was attributed to the national government’s direct guarantee on loans worth P88.9 billion from P72.8 billion in March last year. Manila’s national government foreign contingent debt climbed in smaller increments to P463.8 billion, 3.8 percent higher than last year. Foreign loans directly guaranteed by the government reached P459.6 billion in March, which also grew by 3.8 percent compared to last year. Assumed GFI (government financial institution) guarantees reached P4.2 billion, 10.5 percent higher than levels reported last year. Foreign contingent debts rose as major currencies appreciated against the US dollar and the peso depreciated against the greenback, the BTR said. - GMANews.TV