MANILA, Philippines - The ratio of general government debt relative to the country’s gross domestic product (GDP) continued to improve in the first half of the year given increasing revenue collections and efficient management of debt.
Efforts to improve tax administration and expenditure management have helped ease the Philippines’ tight fiscal situation and pare down high debt levels.
Latest data from the Department of Finance showed that consolidated general government debt stood at P4.5 trillion or 37.3 percent of GDP. This marked a six percentage point improvement from the 44.3 percent registered in 2009 during the previous administration.
This was the lowest level recorded since the Philippines adopted the measurement in 1998.
Under the consolidated general government debt, the obligations of the Philippine government, the Central Bank Board of Liquidators, social security institutions (SSIs) and local government units are taken into account.
The consolidated debt also nets out public holdings of government securities, including the Bureau of the Treasury’s bond sinking fund (BSF).
Debt to GDP is a measure used by debt watchers to assess the creditworthiness of governments.
As of the end of September, the government’s debt reached P5.7 trillion, two percent higher than the P5.61 trillion reported in the same period last year as a result of the depreciation of the peso against the dollar.
The bulk of total debt or P3.76 trillion accounted for domestic obligations while the balance of P1.96 trillion was sourced from foreign lenders.
The emerging total debt amounted to P5.65 trillion or 46.9 percent of GDP. The amount is slightly higher than the year earlier figure of P5.62 trillion.
Also contributing to the increase is the 0.5 percent higher local government units debt than the March 2014 level.
The combined investment in government securities of the Government Service Insurance System and Social Security System rose to P85.7 billion from only P453.8 billion.
As of March 2014, outstanding public sector debt stood at P7.6 trillion, equivalent to 64.3 percent of GDP. The ratio is much lower than the 71.3 percent recorded the previous year, reflecting an improvement of seven percentage points.