MANILA (UPDATE) - The Philippine national government ended 2021 with a total outstanding debt of P11.73 trillion, pushing the debt-to-GDP ratio slightly higher for the year, data from the Bureau of Treasury released Tuesday showed.
For the month of December, total debt decreased 1.7 percent due to net redemption of domestic securities, the BTr said in a statement.
Debt-to-GDP ratio was at 60.5 percent, higher compared to the 54.6 percent in 2020 "but still within accepted sustainable threshold as the economy continues to recover from the effects of the pandemic," the BTr said.
Domestic debt in December was at P8.17 trillion, lower by 3.2 percent compared to the previous month as the repayment of the P540 billion provisional advance from the Bangko Sentral ng Pilipinas outpaced the net issuance of government securities, data showed.
For the full year, domestic debt grew 22 percent in line with the borrowing program that favors domestic issuance to mitigate foreign exchange risks and support local capital market development, Treasury said.
External debt, meanwhile, rose 1.9 percent at P67.81 billion in December compared to the previous month, data showed.
The Bureau said the increase in external borrowing for the month was due to the impact of peso depreciation against the US dollar amounting to P40.87 billion and the net availment of external obligations worth P33.83 billion.
The government increased borrowing in the past few years to fund its COVID-19 war chest. Despite the borrowing uptick, economic managers have said the country's debt-to-GDP ratio remains sustainable.
In 5 and a half years, the administration of President Rodrigo Duterte has nearly doubled the country's debt from P5.95 trillion at the end of June 2016.
Finance Secretary Carlos Dominguez III has said the next administration will see the country’s debt rise to around 63 percent to 64 percent of its GDP, from just 29 percent in 2019.
To bring the debt level to around 40 percent of GDP, the Philippines will need to grow 6 to 6.5 percent per year, he said.