‘2013 General Gov’t Debt to GDP Ratio Improves to 39.2% from 44.3% in 2009’

As of December 2013, the General Government (GG) debt stood at P4,529.4 billion or 39.2% of gross domestic product (GDP).

The year ended with a lower GG-debt-to-GDP ratio compared to that of December 2012, which posted 40.6% amounting to P4,288.7 billion, and saw improvement from 2009, which posted 44.3%.

This continuing trend of decreasing GG-debt-to-GDP ratio shows government will have to ensure sustained fiscal space throughout the medium term.

The decrease in the NG debt level can be attributed to ongoing fiscal consolidation, as the deficit-to-GDP ratio is only 1.3%, and robust economic expansion, as GDP growth is 7.2%.

Moreover, the NG took advantage of broadly favorable domestic funding conditions in 2013 to redenominate away from foreign currency debt. Of the P554.7 billion gross borrowing for the year, 94% was sourced from the domestic market, while the remaining 6% were concessional foreign loans from development partners. This helped reduce the foreign debt component of NG debt to just P1,947.7 billion or 34.3% of the total outstanding NG debt.

A decrease of Local Government debt in 2013 to P71.0 billion from P73.4 billion in 2012 also helped in the decline of said ratio.

Likewise, the intra-sector debt holdings of Local Government in 2012 were trimmed down from P3.1 billion to P0.3 billion in 2013.

The combined investment in government securities of the GSIS and the SSS, meanwhile, rose from P453.7 billion in 2012 to P474.6 billion in 2013.

GG debt includes outstanding debt of the NG, the Central Bank Board of Liquidators (CB-BOL), social security institutions (SSIs) and LGUs, less intra-sector holdings of government securities including those held by the Bond Sinking Fund (BSF). (PNA) CTB/JS/PR/UTB