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NG’s debt reaches P3.867 T in April |
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The Manila Bulletin 07/05/2005
The National Government debt was higher by 1.46 percent to P3.867 trillion as of April from P3.811 trillion the same period in 2004, the Bureau of Treasury said. Compared to March, the NG debt however managed to sustain a small decline of 0.05 percent of P3.868 trillion, of which P1.803 trillion or 47 percent is owed to foreign creditors and P2.064 trillion or 53 percent to domestic creditors. According to the BTr, domestic debt increased by 0.23 percent or P4.8 billion from P2.059 trillion in March due to net issuance of government securities made by the NG. Direct loans under domestic debt in the meantime amounted to P2.061 trillion while government securities were P2.033 trillion. NG foreign debt on the other hand was P1.802 trillion, which was lower by P6.657 billion from last March’s P1.809 trillion. "The decline was attributed to the P12 billion net appreciation of the peso against the US dollar and the P2 billion net repayments from various loans," National Treasurer Omar Cruz said. "However the depreciation of third currencies against the US dollar increased the foreign debt by P7 billion," said Cruz. The BTr said the contingent debt of the NG, composed mainly of guarantees issued by the NG decreased to P598 billion from March of P604 billion. This is a decline of P6 billion resulting from the net redemption in domestic and net repayments in foreign contingent obligations. Finance Secretary Cesar V. Purisima said earlier that the objective of the finance department is to "make sure that debt (accumulation) is not higher than or do not accelerate faster than the economy." "We’re here basically to ensure that the relationship between debt and GDP (gross domestic product) is acceptable," Purisima added. He said debt profile is rising because the country continues to suffer from a budget deficit, which is expected to hit P160 billion to P180 billion this year. Purisima said the Philippine debt burden "continues to be one of the biggest challenges that the NG faces." He added, "we have one of the highest debt to GDP ratios in the world and it’s about time that we strongly address this lingering issue." NG debt is now 78.7 percent of GDP." The National Power Corp. is the government’s biggest guarantee burden since it is incapable of borrowing by itself and the NG has to step in to borrow from the international market. These debts are not carried directly on the government’s books but immediately become due once the primary borrowing agency fails to meet its obligations to creditors. For 2005 the DoF has factored in debt service of P645 billion, which is 12.6 percent of GDP from the expected P575.6 billion this year. Interest expense in the meantime is expected to reach P301 billion and principal payments are about P344 billion. Malacanang has directed the inter-agency Development Budget Coordination Council to identify and review measures to lower debt load and prevent an imminent declaration of an unmanageable public sector deficit. |
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