RP debt increases to record high

RP debt increases to record high

MANILAL: Philippine central government debt in September rose 2.8 percent from a month earlier to a record US$66 billion as President Gloria Arroyo's administration continues to spend beyond its means.

Domestic debt, which accounts for 53 percent of the total, rose 18 percent to 1.96 trillion pesos ($35 billion), the Department of Finance said. Foreign debt rose 15 percent to 1.77 trillion pesos. The Philippines, which has been running budget deficits since 1998, spends about a third of its revenue paying interest on the national debt.

Standard & Poor's and two others ratings companies have threatened to downgrade the nation's junk debt rating if the tax package isnFt passed. Lower ratings may increase borrowing costs because investors who perceive higher risk will demand higher yields. -- Bloomberg