GOVERNMENT DEBT DOWN BY P28 BILLION TO P4.396 TRILLION
MANILA, MARCH 13, 2010 (STAR) By Iris C. Gonzales - The government’s debt went down by P28 billion to P4.396 trillion as of end-December last year from the end-November 2009 level of P4.424 trillion, due mainly to the appreciation of the peso against the dollar which helped cut the value of the foreign debt, the Bureau of the Treasury (BTr) reported yesterday.
Of the P4.396 trillion total outstanding debt, P1.926 trillion or 44 percent is owed to foreign creditors and P2.470 trillion or 56 percent to domestic creditors, data from the BTr also showed.
The Treasury attributed the increase in domestic debt by P18 billion or 0.7 percent to the net issuance of government securities made by the government. This happened as the Treasury issued more bills and bonds than it had redeemed during the period.
On the other hand, the BTr said the decrease in the government’s foreign debt of P46 billion or 2.3 percent from the level as of end-November 2009 was due to the P19 billion appreciation of the peso against the dollar.
This was partially offset by the P34 billion depreciation of the third currencies against the dollar, P6 billion net availments and P1 billion adjustment due to conversion of ADB loans.
According to the Bangko Sentral ng Pilipinas (BSP), the peso further strengthened against the dollar in December 2009, hitting an average of 46.4211 against the dollar from an average of 47.0324 against the dollar in November.
The contingent debt of the government, meanwhile, rose to P614 billion or higher by P44 billion from the end-November 2009 level of P570 billion.
Contingent debt is composed mainly of guarantees issued by the government.
The foreign contingent obligations increased by P47 billion while domestic contingent obligations decreased by P2 billion from end November 2009 level of P82 billion.
The government borrows from local and foreign lenders to finance its budgetary requirements.
It has been trying to put the country’s fiscal house in order but external developments, administrative loopholes in revenue collection and rampant corruption in government revenue agencies continue to bloat the deficit.
The government’s budget deficit has already ballooned to P298.5 billion in 2009, above last year’s programmed ceiling of P250 billion.
This year, finance officials expect a budget gap of P293 billion.
Chief News Editor: Sol Jose Vanzi
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