MANILA, Philippines – The country’s outstanding public sector debt amounted to P5.7 trillion as of March 2010, according to latest data from the Department of Finance.
The figure is equivalent to 72.5 percent of the country’s total economic output or gross domestic product (GDP). This debt to GDP ratio is lower than the 74.1 percent of GDP ratio recorded as of December 2009.
The P5.7-trillion debt represents a slight increase of 0.5 percent, equivalent to P29.1 billion, from the end-December 2009 debt level of P5.68 trillion.
The outstanding public sector debt comprises the total debt of the National Government, local government units, government financial institutions and all other state-owned agencies.
According to the DOF data, total domestic debt of the public sector increased 2.4 percent to P2.8 trillion while total foreign debt increased 1.2 percent to P3 trillion.
“In particular, the foreign debt stocks of the 14 monitored non-financial government corporations or MNFGCs public sector decreased by 4.2 percent but this was partially offset by the increase of debt of the financial public sector composed of the Bangko Sentral ng Pilipinas (BSP) and government financial institutions,” the DOF said.
In its report, the DOF said that total general government debts, which include National Government debts with the so-called Bond Sinking Fund, the debts of the old Central Bank, social security institutions (SSIs) and local government units (LGUs), less intra-sector debt holdings decreased 1.1 percent from the previous year’s level of P3.6 trillion or 46.3 percent of GDP.
The non-financial public sector, meanwhile, posted a total debt of P4.6 trillion which is equivalent to 58.2 percent of GDP. This amount represents a 1.4-percent decrease from the previous year’s P4.7-trillion figure.
As of March 2010, 51.8 percent of the total debt is owed to foreign creditors and the remaining 48.2 percent is owed to domestic creditors of the public sector.
The government has been trying to trim its debts through prudent management of state-owned agencies.
The Aquino administration hopes to fix the country’s fragile fiscal position by trimming the debts of the National Government and state-owned firms. It has been cutting on costs and unnecessary expenses by rationalizing the operations of government-owned and controlled corporations and reviewing which ones may be recommended for abolition.