NG debt tops P9 trillion in June
DOF says level ‘manageable’
The debt of the national government breached the P9-trillion mark in June this year, but the Department of Finance (DOF) was quick to explain that this level remains manageable and lower compared with other countries.
The total outstanding debt of the Philippine government stood at P9.054 trillion at end-June, up 15 percent or P1.185 trillion compared with P7.868 trillion in the same month last year, data from the Bureau of the Treasury showed yesterday.
But despite the sizeable annual uptick, the DOF said the Duterte administration has been “prudent” in managing the national government’s debt, which “positioned” the Philippines to navigate the challenges brought about by the coronavirus.
In particular, the DOF cited World Bank Country Director Ndiame Diop’s comment that the Philippines is among the countries “in good shape” to bounce back from the current global health crisis.
While the total debt stock continues to rise, 68 percent of it, or P6.19 trillion, were held by Filipinos, and only the remaining balance of P2.864 trillion, equivalent to P32 percent, were sourced from foreign creditors.
As the ratio of government debt to the economic output of the Philippines before the COVID-19 crisis, the level was also just 39.6 percent, way below the 60 percent to 70 percent ratios incurred by other sovereign states.
“I think the prudent fiscal management of the past few years has really positioned the country to be among the countries that are really at the forefront in terms of capacity to respond on the fiscal side,” Diop said.
Unlike the Philippines, Diop pointed out that other countries are facing a “tough” period ahead as their national debts in relation to their respective economies were around 60 percent to 70 percent.
“So I think the good shape in which the Philippines is under this crisis positions it very, very well going forward,” the World Bank representative said.
In June 2020, the national government debt rose by 1.8 percent compared with P8.89 trillion in the previous month due to the net issuance and availment of domestic and external financing.
Domestically, government debt jumped month-on-month by 2.6 percent from P6.034 trillion, while external debt increased 0.3 percent compared with P2.856 trillion last year.
In 2020, the Duterte administration expects the outstanding debt to hit P9.6 trillion, equivalent to a debt-to-gross domestic product ratio of 49.8 percent, the highest since 2011.