MANILA, JUNE 13, 2011 (STAR) By Iris C. Gonzales - The National Government’s outstanding debt rose by P247.5 billion or 5.6 percent to P4.7 trillion in March compared to year-ago level as the Aquino administration continues to rely on foreign and local debt to pay maturing obligations.

Month-on-month, the debt stock increased by 1.1 percent or P50.3 billion from the end-February level of P4.65 trillion.

Divided over a population of 94 million, theoretically, the P4.7-trillion debt stock comes out to P50,053 in debt for each Filipino.

Of the P4.7 trillion outstanding debt, domestic borrowings amounted to P2.7 trillion in March, up 5.1 percent or P130 billion from a year ago and by a slight 0.1 percent from February as the government issued more treasury bills and bonds than the amount of maturing debt notes during the period.

The National Government’s foreign borrowings also increased as of end-March by 6.1 percent or P117.5 billion to P2.039 trillion from a year ago. Month-on-month, the increase was slightly lower at 2.4 percent or P47.9 billion from P1.99 trillion in February as the government borrowed more from the external debt market than the amount of its maturing obligations during the period.

A stronger peso against the dollar helped reduce foreign public debt figures by roughly P11 billion. In March, the average exchange rate was P43.51 against the dollar, stronger than the P43.70-to-the-greenback in February.

The debt stock excluded contingent debt of the National Government which stood at P525 billion in March.

Contingent debts are guarantees issued by the National Government. These turn into actual liabilities each time a state-owned agency or corporation with guaranteed loans fail to pay their obligations.

In March, contingent debts were lower by P60 billion or 10.3 percent from a year ago and by P21 billion or 3.8 percent compared to the February contingent debt level.

This as domestic contingent debt of the government went down by P9 billion as a result of the repayment of zero-coupon bonds of state-owned National Power Corp. (Napocor).

The government borrows from the local and foreign debt markets to finance maturing obligations and to plug a budget gap.

The Aquino administration hopes to slash the budget deficit as a ratio of gross domestic product (GDP) to 2 percent in 2013 from the projected 3.2 percent this year.

This year, the deficit is projected to hit roughly P290 billion from the P314.4 billion recorded in 2010.

Chief News Editor: Sol Jose Vanzi

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