MANILA, Philippines - The national government’s outstanding debt may reach P6.47 trillion by end-2017, corresponding to about 40.76 percent of the country’s gross domestic product, the Bureau of the Treasury said.
National Treasurer Rosalia De Leon said the country’s outstanding debt for 2017 may increase 6.24 percent to P6.47 trillion from the P6.09 trillion recorded in end-2016.
This was, however, lower than the P6.526 trillion debt ceiling set by the government according to the Department of Budget and Management’s Budget of Expenditures and Sources of Financing (BESF) document.
“(We may see lower debt) because we expect very big collection from the BIR (Bureau of Internal Revenue) and the BOC (Bureau of Customs), and then we are going to retire some of our monetary investment, liability management is part of that,” De Leon said.
As a percentage of GDP, debt is expected to hit a new record low of 40.76 percent of GDP by end-2017 from the 42.1 percent recorded in 2016.
The government is targeting a GDP growth rate of 6.5 to 7.5 percent this 2017.
Debt-to-GDP ratio is an indicator used by debt watchers and credit rating agencies to assess a country’s debt sustainability.
A lower ratio indicates the government is generating more resources than debts, giving it more payment capacity.
For 2018, the Treasurer said outstanding debt is projected to reach P7.05 trillion.
The government borrows from the local and foreign creditors to finance its budget deficit and pay maturing debt.
As of end-May, the national government’s debt pile has declined 0.4 percent to P6.345 trillion from the P6.37 trillion recorded end-April.
Debt-to-GDP ratio, meanwhile, was recorded at 41.8 percent as of the first quarter of 2017.
The country’s economy expanded 6.4 percent during the period.
In the medium-term, the DBM said the proportion of debt to the GDP is expected to 36.7 percent by 2022.