Philippine debt up 4.2% in May

The Philippine government's outstanding debt as of end-May went up by 4.2 percent year on year on back of sharp rise in local loans. The Bureau of Treasury reported Wednesday the national government's debt as of May hit 5.36 trillion pesos (123.73 billion U.S. dollars), 64.5 percent of which was sourced from domestic creditors. The rest was owed to foreign creditors. Domestic debt rose 14 percent year on year to 3.46 trillion pesos (79.87 billion U.S. dollars) as of end-May. But the 10 percent decline in loans from foreign lenders tempered the increase in outstanding debt. Most of the government's borrowings funded the fiscal deficit and are used to pay maturing liabilities. The increase in domestic borrowings is in line with the government's strategy to reduce the foreign currency component in the government debt, lengthen maturities, and reduce borrowing costs.