The country’s general government (GG) debt, as a ratio of gross domestic product (GDP), is seen to reach 46.7 percent by the end of the year, placing the country “in the middle of the pack” of select countries in Asean and Latin America in terms of the share of debt to their GDP, the Bureau of the Treasury (BTr) said.
The projected GG debt for the end of 2020 will increase from the 34.1 percent posted as of end-December 2019.
The Philippines, just like many countries, had to secure funding for its response to the coronavirus disease 2019 (COVID-19) pandemic.
“(Our GG debt) will be in the middle of the pack, against other countries like Asean… and Latin American countries,” Rosalia de Leon, national treasurer, said during the continuation of the Development Budget Coordination Committee’s virtual briefing before the Senate finance committee yesterday.
“Thailand would be at 49.5 percent, Malaysia would be at 65.5, Mexico would be 65.9 percent,” she added.
GG debt includes the outstanding debt of the national government, social security institutions, and local government units minus the intra-sector debt holding of government securities, including those under the bond sinking fund.
Meanwhile Bayani Agabin, DOF undersecretary, also said during the virtual briefing that the national debt-to-GDP ratio may settle at 54 percent at the end of 2020, 58 percent for 2021, and 59.9 percent at 2022.
“It’s still much better than our all time debt level of around 71.6 percent in 2004,” Agabin said.
“We project that (even at) at 60 percent it’s still manageable and it’s still responsible borrowing,” he added.
De Leon also said that the standard debt-to-GDP, that was already set before based on studies of the International Monetary Fund, was set “during normal times.” “That refers to the 60 percent. But of course, we are in something that’s extraordinary and a lot of other countries are also trying to secure funding to be able to cope with the pandemic, given that their requirements, similar to us are very huge,” de Leon said. — Angela Celis