Your share of the national debt: P58,000

Rain Castro,

InterAksyon.com
The online news portal of TV5

MANILA - The government borrowed more money from the domestic market at the close of February, thus pushing up its debt by eight percent year-on-year.

According to the Bureau of Treasury, the national government's debt climbed to P5.325 trillion at end-February from P4.913 trillion in the same period last year.

Although the government usually refinances its debt -- in other words, it borrows more to pay down older liabilities -- the taxpayer ultimately foots the bill.  With a population of 92.34 million, this means every Filipino is in hock for P57,667.

The government incurs new debt whenever its revenues, particularly taxes, fall short of its expenditures, thus creating what is called a budget deficit.

For this year, the government aims to cap its deficit at two percent of the Philippine economy as measured by the country's gross domestic product (GDP). In line with this, the government's debt is expected to increase to P5.779 trillion, equivalent to 48 percent of GDP.

Of the total amount of debt outstanding at end-February, the government owes 65 percent to local lenders and the remaining 35 percent to foreigners.

Pushing up the government's debt was the 22 percent increase to P3.448 trillion in the outstanding credit extended by local lenders. In contrast, money owed to foreigners dropped 10 percent year-on-year to P1.877 trillion.

The Aquino administration has pursued a policy of increasing the share of debt owed to local to insulate the government from foreign exchange fluctuations, as well as to maximize lower interest rates in the country.

In fact, Treasury rates have slumped to record lows since last year on the back of strong inflows of foreign portfolio investments and remittances.