Manila: The country’s debt slightly declined as of end-August this year due to the government’s full repayment of its biggest local bond for the year, worth PHP516.34 billion. In a statement Tuesday, the Bureau of the Treasury (BTr) said the national government’s (NG) debt went down by 0.5 percent to PHP17.47 trillion in August from PHP17.56 trillion as of end-July.

According to Philippines News Agency, the slight decline was also due to a stronger peso, which reduced the value of the country’s external debt. The BTr said the debt reduction was accompanied by an improvement in the country’s debt profile as the share of domestic debt to total borrowings increased to 69.2 percent from 68.9 percent in the previous month. “This indicates a generally more favorable debt position, given that domestic debt is less vulnerable to shifts in foreign exchange movements,” it said.

“In addition, domestic borrowing is largely owed to Filipinos themselves, providing a safe and secure investment vehicle for wealth growth while also ensuring that the money circulates back into the local economy,” the BTr added. Domestic debt declined by PHP21.39 billion to PHP12.09 trillion while external debt also fell by PHP73.68 billion to PHP5.38 trillion.

Year to date, the national government raised PHP1.84 trillion in gross domestic financing, including the issuance of Retail Treasury Bond Tranche 31 (RTB-31). “This demonstrates strong investor confidence in government securities as an inclusive and high-quality investment option for Filipinos,” the BTr said. NG guaranteed debt also dropped in August to PHP346.46 billion, indicating a PHP6.51 billion month-on-month decline.

The reduction was attributed primarily to the effect of a stronger peso on external guarantees. “The Bureau reaffirmed its commitment to prudent debt management and responsible borrowing, ensuring that financing activities remain aligned with the country’s high and inclusive growth agenda, while safeguarding the welfare of future generations of Filipinos,” the BTr said.