The national government plans to spend more than P1 trillion to settle some of its liabilities next year, but at the same time borrow over P2 trillion, data from the Department of Budget and Management (DBM) revealed.
Under the proposed budget plan for 2022 submitted to Congress, the national government intends to slightly raise its debt service expenditures by 0.7 percent to P1.298 trillion from P1.289 trillion this year.
The government’s budget for debt repayments cornered about 25.8 percent of the proposed P5.024 trillion 2022 national budget.
Next year’s debt servicing has allotted P785.21 billion to pay-off principal amortization. Of that amount, P645.9 billion will go to domestic creditors, while the remaining P139.21 billion is for foreign lenders.
About P512.58 billion, meanwhile, is earmarked for interest payments. Of that total, local banks will be paid P398 billion, while offshore creditors secured the remaining P114.6 billion.
However, the national government also plans to take additional debt in 2022, but at a much lower amount.
The Duterte administration submitted to Congress a proposal to borrow P2.472 trillion next year, 19.5 percent lower compared with P3.072 trillion in 2021.
Based on the financing plan, the government is looking bringing down its domestic borrowings by 23 percent from P2.491 trillion to P1.912 trillion.
Moreover, the national government expects its overseas financing to drop 3.6 percent to P560.58 billion from P581.37 billion a year earlier.
But as amount of fresh borrowings is programmed to outpace the size of debt repayments, the outstanding debt of the national government is now expected to hit a record P13.42 trillion by the end of 2022.
The total liabilities of the government will be 14 percent higher than the P11.73 trillion programmed by end-2021.
A surge in state borrowing amid the pandemic recession has already elevated the government’s debt ratio above its previous trajectory.
Under the 2022 budget plan, debt-to-gross domestic product (GDP) is estimated to further increase from 59.1 percent this year to 60.8 percent in 2020.
Before the pandemic, the