Finance Secretary Benjamin Diokno yesterday said the country’s more than P12 trillion debt is “manageable” and should “not be a cause for concern.”
Diokno made the statement at yesterday’s hearing of the Commission on Appointment. The body confirmed his appointment later in the day.
Diokno said the Philippines’ debt-to-gross domestic product ratio increased due to the negative effects of the new coronavirus disease 2019 pandemic.
The debt-to-GDP ratio is said to be the better measure of a country’s economy’s capability to repay its debt.
The Bureau of Treasury last July said the government’s outstanding debt rose to P12.89 trillion mainly due to additional local and foreign borrowings, aggravated by a weak peso.
The DOF estimated then that the end-July debt was equivalent to at least 62 percent of the country’s GDP.
Diokno told the CA the pandemic caused the debt-to-GDP ratio to increase from 40 percent to around 62 percent as the government has to look for funding to purchase vaccines and boost the country’s health services.
But he said this increase is not a cause for concern, especially on the government’s capability to pay maturing obligations.
“That should not be a cause for concern. Sixty-two percent, that’s very manageable compared to other countries whose debt-to-GDP ratio is 200 percent or even 100 percent in many European countries,” Diokno said.
The DOF earlier projected the debt to reach P14.64 trillion by the end of next year, one year after the Marcos administration assumed office.
Diokno assured the CA the country will be able to achieved from 6.5 to 8 percent economic growth rate in the next six years of the administration.
He said the country also has sound economic fundamentals and that the administration has a very strong financial and economic strategy and team.
Diokno said this will enable the government to earn higher revenues.
