Philippine Debt To GDP Ratio Down To 44.8% In 2015

Proportion of the Philippines debt to gross domestic product (GDP) further improved to 44.8 percent in 2015 from year-ago’s 45.4 percent on back of robust domestic expansion and disciplined fiscal spending.

“The Philippines is fully committed to a proactive liability management strategy to keep our debt structure resilient. I am optimistic we can further trim down our debt-to-GDP ratio, which from 52.4 percent in 2010 has narrowed to 44.8 percent in 2015, a 7.6 percentage point (ppt) difference,” Finance Secretary Cesar Purisima said in a statement Thursday.

The Finance chief said fiscal reforms, alongside the efficient use of government funds, resulted in the lesser need for the state to borrow funds to finance its projects and programs.

Bureau of Treasury (BTr) data show that the national government’s (NG) outstanding liabilities in 2015 reached Php 5.95 trillion, 3.8 percent higher than year-ago’s Php 5.75 trillion level.

Compared to the end-November 2015 level, the increase is 0.3 percent.

Of the total, outstanding domestic debt amounted to Php 3.88 trillion, 1.7 percent higher than year-ago level but 0.3 percent lower than the end-November 2015 level.

The month-on-month drop in domestic debt was attributed to net redemption of government securities amounting to Php 11.35 billion, which countered the Php0.02-billion rise in peso value of foreign currency domestic liabilities due to peso depreciation.

NG’s external liabilities rose 8.1 percent year-on-year and 0.6 percent month-on-month to Php 2.07 trillion.

This was traced to net availments worth Php 3.81 billion and peso depreciation as the US dollar and third currency- denominated debt went up Php 2.18 billion and Php 7.26 billion in local currency valuation, respectively.

Purisima said “a challenging external environment calls for consistent discipline in making sure productive debt works in our favor.”

“We will continue to stretch average maturities reasonably (now at 10 years) and keep a healthy preference for domestic financing (now at 67 percent),” he said.

Last year, guaranteed obligations of the state reached Php 438 billion, up by 2.7 percent compared to the end-2014 level because of net repayment on guarantees.

”This reversed the effect of currency fluctuation that raised the peso value of guarantees by Php 2.91 billion,” the Bureau of the Treasury (BTr) said.

“The average Filipino now lives in a time when news about government debt, usually a headache to all, is now one of many examples of consistent year-on-year improvement being made by our country. We hope this trajectory of better and better news can be kept for the next 6 years and beyond,” Purisima added. (PNA) RMA/JSV/RSM