“The Philippines before the Covid-19 crisis was on the road to A-rating. We’re not saying that the Philippines has not suffered from this crisis, together with the rest of the world. But our relative position among emerging economies gives us confidence that the Philippines would have a U-shaped bounce-back once the pandemic fades…” — Diokno
MANILA – Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said a report that identified the Philippines as among countries with high financial strength validates the authorities’ belief in a robust economic recovery from the pandemic.
A report from The Economist showed that the Philippines placed sixth (6th) out of 66 select emerging economies with a high level of financial strength.
Botswana led the list, followed by Taiwan, South Korea, Peru, and Russia. Thailand, Saudi Arabia, Bangladesh, and China rounded out the Top 10, placing seventh to 10th, respectively.
These economies were measured based on the percentage of public debt to gross domestic product (GDP), foreign debt, cost of borrowing, and reserve cover.
Diokno, in a Viber message to journalists on Friday, said the country’s ranking in the list “is consistent with what we’ve been saying all along: the coronavirus (Covid-19) pandemic hit the Philippines from a position of strength.”
“The Philippines before the Covid-19 crisis was on the road to A-rating. We’re not saying that the Philippines has not suffered from this crisis, together with the rest of the world. But our relative position among emerging economies gives us confidence that the Philippines would have a U-shaped bounce-back once the pandemic fades,” he said.
Diokno traced this strength to the current administration’s “well-crafted economic plan, the close coordination and competence of President (Rodrigo) Duterte’s economic team, and the President’s strong leadership in getting the much-needed legislation passed by Congress.”
Data from the Bureau of the Treasury (BTr) show that the national government’s total outstanding debt as of the end of March reached PHP8.177 trillion, the bulk, or 67 percent, of which is accounted for by domestic debt while 33 percent were sourced from external fund sources.
The proportion of the country’s debt-to-domestic output also stood at 44.2 percent as of 2019, down from as high as 78.3 percent in 1986.
Finance Secretary Carlos Dominguez III earlier traced this to continued sound fiscal management by the administrations since that period.
Dominguez said excluding guarantees, the country’s actual debt-to-GDP ratio was at 41.5 percent last year.
Relatively, BSP data show a preliminary figure of a record-high USD89 billion for the county’s gross international reserves (GIR) as of end-March.
This amount provides 7.9 months’ worth of cover for imports of goods and services and payments of primary income, higher than the international standard of a three-month cover. (ia/PNA)