RP debt swells to P4.2 trillion under GMA

MANILA, Philippines - The country’s debt has risen to P4.2 trillion during President Arroyo’s prolonged incumbency, surpassing the debts incurred by her predecessors, latest data from the Department of Finance show.

This means since the post-Marcos era, the debt stock only hit the trillion mark during the Arroyo administration from only P469 billion accumulated during former President Corazon Aquino’s six-year term which was from 1986 to 1992.

Data from the Finance department showed that the government of former President Fidel Ramos posted a debt of P387 billion while the short-lived presidency of actor-turned-politician Joseph Estrada incurred a debt of P654 billion.

Both Aquino and Ramos served a one-time full six-year term as mandated in the Constitution. Estrada, on the other hand, incurred a debt of P654 billion with barely two and half years in power after being toppled by People Power II.

DOF data, however, indicates that President Arroyo racked up the debt during her eight and a half years of presidency which started in 2001 or an average of half a trillion pesos annually.

Finance Secretary Margarito Teves downplayed the P4.2-trillion debt level and stressed that the “effective” debt generated during Mrs. Arroyo’s term was only P1.5 trillion for the last eight years.

Teves said that of the P4.2 trillion, P2.7 trillion was spent to pay maturing debts incurred by the previous governments while P1.2 trillion were used to service interest payments.

Another P300 billion was for cash build-up, he added.

“So, only P1.5 trillion can be attributed to the present administration,” Teves said.

Teves, nevertheless, explained that the debt to gross domestic product (GDP) ratio improved during the Arroyo administration to 56.8 percent in 2008 from a high of 78.2 percent in 2004. In 2001, when the President took over the presidency, the debt to GDP ratio was at 65.7 percent.