Former President Duterte borrowed P6.843 trillion in total during his six years in Malacañang, driven mainly by his administration’s borrowing spree at the height of the pandemic, data from the Bureau of the Treasury showed.
From a government debt of P5.948 trillion when former President Duterte took office in June 2016, debt jumped by more than double to P12.791 trillion when he stepped out of the Palace last June 30.
Divided among the estimated 110 million population, each Filipino now owes a sum of around P116,289.
Based on the Treasury report released Friday, Aug. 5, the end-June outstanding debt of the national government was also 14.6 percent more than the P11.166-trillion in the previous year and 2.4 percent higher compared with P12.495-trillion last May.
But despite the massive rise in debt load during the previous administration, economists pointed out that the government’s risk of falling into a debt crisis remained low.
The Treasury data showed that the national government financed its borrowing predominantly from domestic lenders, accounting for 68.5 percent of its outstanding financial obligations.
Moreover, interest rate on government debt was at a moderate level, while the weighted average yield on sovereign bonds was generally below the real growth rate.
Since 2019, the total debt of the government ballooned from just P7.731 trillion, or 39.6 percent of gross domestic product (GDP). Its debt ratio hit a 17-year high of 63.5 percent last year.
At end-June, local debt amounted to P8.77 trillion, up 10 percent from P7.938 trillion a year earlier. Month-on-month, it inched up by 1.2 percent from P8.665 trillion.
The Treasury said the rise in domestic obligations was driven by fresh issuances of government IOUs, along with the strengthen of the US dollar against the peso.
Foreign debt, on the other hand, rose 13 percent to P4.025 trillion from P3.227 trillion. This was also higher by 5.1 percent against P4.830 trillion in the previous month.
“For June 2022, the increment in external debt was attributed to the impact of local currency depreciation against the US dollar amounting to P186.94 billion and the net availment of external financing amounting to P43.18 billion,” the bureau said.
The peso averaged 54.97 against the US dollar in June, significantly weaker compared with 48.704 a year earlier.
Earlier, Finance Secretary Benjamin E. Diokno said the Philippines continued to be faring well even with the increased in debts.
“Right now, national debt to GDP ratio as we expect it to be around 61.8 percent. It will be back to 61.3 percent by 2023 and then go down to 60.6 percent by 2024, and then 59.3 percent by 2025, 57.7 percent by 2026 and 2027 to 52.5 percent,” Diokno said.
“In other words, by the end of the Marcos years, we expect that national debt to GDP ratio to be below 60 percent,” he added.