Outstanding PH Loans Hit New High of 11.97 Trillion Yen in October

Metro Manila (CNN Philippines, December 1) – The Philippines’ debt stock hit a new high in late October as the government took out more loans as the global health crisis raged.

The Treasury Office on Wednesday announced a total outstanding loan portfolio of 11.97 trillion yen during the period, slightly exceeding the previous record of 11.91 trillion yen set in September.

October’s figure represents a 19.38% increase from the 10.02 trillion yen tally in the same month last year.

The bureau reported 8.46 trillion yen in domestic loans for the month, up 19.65% annually with the net issuance of government securities. Debt contracted locally represents 70.7% of total borrowings.

At the same time, the country’s external debt outstanding stood at 3.5 trillion yen at the end of October, up 18.74 percent from last year.

“For October, the lower external debt figure was attributed to the impact of local and foreign currency exchange rate adjustments amounting to 22.68 billion yen and 8.45 billion yen, respectively. This more than offset the net use of foreign bonds amounting to 4.96 billion yen, ”the Treasury said.

Government guaranteed payments, however, fell in October to 426.46 billion yen. The 4.77 percent drop is due to the net repayment of national guarantees of 1.24 billion yen and external guarantees of 800 million yen, the agency said.

The Treasury also cited the exchange rate adjustment on guarantees denominated in local currency and third currency, resulting in declines of 1.28 billion yen and 2.25 billion yen respectively.

“However, the reclassification of the PSALM syndicated term loan from the national guarantee to the external guarantee had a net adjustment effect of 1.55 billion yen to the national guarantees,” he added.

Earlier this month, Senate Minority Leader Franklin Drilon questioned the country’s ability to pay off outstanding loans with a total debt stock already equal to 61.3% of gross domestic product (GDP) at the end of September. The international threshold is 60%.

But President Rodrigo Duterte’s economic team, through the chairman of the Senate Finance Committee, Sonny Angara, has assured that the debt-to-GDP ratio will remain in the 60% range, even if the authorities are asking for more loans while the economy continues to grow.

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