As of June 2015, the General Government (GG) debt stood at P4.7 trillion, a 4.1% increase from the P4.5 trillion recorded as of the same period last year. The main contributor was the P193.2 billion rise in outstanding National Government (NG) debt (net of the Bond Sinking Fund holdings). This increase was primarily brought about by NG financing operations and the impact of peso depreciation on foreign debt comprising 37% of NG debt stock.

On the other hand, Local Government debt went down by 3.0% to P67.5 billion compared to last year’s level of P69.7 billion as a result of loan repayments and higher revenue which provided Local Government Units with the funds needed for operating and capital expenditures and the repayment of outstanding obligations. Social Security Institutions such as the GSIS and the SSS did not contribute to the debt stock but raised their holdings of Government Securities by 1.0% or P4.6 billion from last year’s level.

Notwithstanding the increase in nominal GG debt, the figure improved as a percentage of GDP from comparable figures last year. From 37.3% in Q2 2014, the ratio is down to 36.2% as of June 2015. This ratio marks an improvement of 8.1 percentage points (ppt) from the 44.3% posted for the year of 2009, and 6 ppts from the 42.2% registered in 2010. The downward trajectory highlights the improving carrying capacity and sustainability of GG debt.

Finance Secretary Cesar V. Purisima said, “Our general government debt to GDP ratio has consistently taken a downward trajectory since the President prioritized putting our fiscal house in order. Further narrowing reflects how we continue run a tight ship– crucial especially in sailing through these uncertain times.”

GG debt consists of the outstanding debt of the NG, the CB-BOL, Social Security Institutions, and the Local Government Units less intra-sector debt holdings of government securities including those held by the BSF.