Gov't debt stock up by 2% in October

The National Government's debt stock continued to climb at the end of October after it borrowed $1 billion from the global bond market, as well as due to the peso's fall against the dollar, latest data from the Treasury bureau showed. Total outstanding debt went up by 2 percent or P86 billion to P4.424 trillion as of end-October from the end-September level of P4.338 trillion. This means each of the 92.23 million Filipinos owes roughly P47,968. The government owed 45 percent of the total or P1.975 trillion to foreign creditors, the balance to local lenders. The Treasury bureau said domestic debt increased by 1 percent or P25 billion in October from a month earlier as the government issued more Treasury bills and bonds than it had redeemed. Meanwhile, the government's foreign debt increased by 3.2 percent or P61 billion as the country borrowed more than it paid. Last October, the government sold $1 billion in global bonds, its third bond sale in 2009. In January last year, the government also sold $1.5 billion in dollar-denominated bonds and in July, it raised $750 million also from the sale of bonds. The government's total foreign commercial borrowings reached $3.2 billion last year. The government's contingent debt, on the other hand, declined by P14 billion to P565 billion after it repaid some loans. Contingent debt consists of guarantees issued by the National Government, mostly to state-owned corporations. The government borrows from local and foreign lenders to finance its operations given a huge budget gap. It has been trying to put the country's fiscal house in order but the slowing global economy, poor tax collections and rampant corruption in revenue agencies continue to bloat the deficit. The government's budget deficit has ballooned to P272.5 billion at the end of November, more than the original ceiling of P250 billion. Finance officials are bracing for a budget gap of a little under P300 billion for 2009 and it expects the gap to hit P293 billion this year. — GMANews.TV