PH total debt reach P13.42 T in 2022

The Philippines has incurred an outstanding total debt of P13.418 trillion as of end-2022, up by 14.4 percent from end-2021’s P11.728 trillion, the Bureau of the Treasury (BOT) announced Thursday, Feb. 2.

The BOT, an attached agency of the Department of Finance (DOF), said that for the month of December versus November, the National Government (NG) debt was slightly lower by 1.7 percent or from P13.644 trillion because of the peso appreciation and the net redemption of domestic government securities.

DOF Secretary Benjamin E. Diokno said Thursday that the debt-to-GDP ratio, despite the higher total NG debt, is still lower at 60.9 percent in 2022 against the 61.8 percent target under the Medium-Term Fiscal Framework (MTFF).

Peso/Reuters photo (Manila Bulletin article)

“Our medium-term fiscal plan and exemplary GDP growth have allowed us to outpace our borrowings. This gives us confidence that we can reach our targets by 2025,” Diokno.

The government is targetting to bring down the debt-to-GDP ratio to less than 60 percent by 2025 and further down to 51.1 percent by 2028, as well as to reduce the deficit-to-GDP ratio to three percent by 2028 and to maintain high infrastructure spending at 5 to 6 percent of GDP annually, said the DOF.

The DOF in a statement said its debt management strategy prefers more domestic market borrowings over external sources to minimize foreign exchange risk.

Fluctuations in exchange rates run the risk of increasing debt service payments each time the peso depreciates, it added.

The debt-to-GDP ratio of 60.9 percent for 2022 was an improvement from 63.7 percent from end-September last year.

Of the total outstanding debt, 68.6 percent are domestic debt worth P9.208 trillion while external debt was at P4.210 trillion or 31.4 percent of total debt.

Last year, guaranteed obligations increased by P11.1 billion or 2.8 percent month-over-month to P399.05 billion. The DOF said this was because of the net availment of domestic guarantees and the net effect of currency fluctuations, which increased the value of external guarantees. The guaranteed debt was 5.9 percent lower from 2021 level of P423.92 billion.