According to the data released by the Bureau of Treasury on Tuesday, the Philippine government’s debt has ballooned to a massive ₱8.6 trillion as of April 2020. The rise in loans comes as the country seeks to get a fresh round of funding in order to address the effects of COVID-19 in the Philippines.
Based on the report released by the agency, the national debt rose by 1.5 percent. Initially, the March figures were valued at ₱8.47 trillion “to reflect the P300 billion short-term borrowing through the repurchase agreement with the Bangko Sentral ng Pilipinas (BS)” or the Central Bank of the Philippines.
While the national debt rose by a recorded 1.5 percent, CNN reports that the total domestic debt incurred by the country with its loans rose to 12.6 percent.
The growing government securities – amounting to 6.9 percent – is a large contributing factor to this. The Philippine Star reports that this offsets the effects of peso appreciation in the country, which led to the further decline of onshore dollar bonds by ₱170 million.
The massive loan and debt increase have yet to be seen since the 2008 global financial crisis, notes Rappler. Despite this, the Philippine government’s loans and debts are still expected to reach a new high, with the Department of Finance securing approximately $5 billion in foreign loans.
The sources of funding from a variety of multilateral lenders and commercial markets come from the Asian Development Bank with $2.1 billion, the Asian Infrastructure Investment Bank with $750 million, global bonds valued at $2.35 billion, and the World Bank with $800 million.
However, Benjamin Diokno, BSP Governor, assured the public that the government is capable of paying its loans with the “sound fiscal and monetary state and modest budget deficit” it attained even before the arrival of the virus pandemic, reveals CNN.