The national government’s outstanding debt as of the end of 2020 reached P9.79 trillion, equivalent to 54.5 percent of the country’s gross development product (GDP), the Bureau of the Treasury (BTr) disclosed on Tuesday.
The BTr said the P9.70 trillion was 3.3 percent or P339.05-billion higher than the P10.13 trillion at end-November “primarily due to net redemptions of domestic loans.”
Compared to the whole of 2019, the bureau added that the government debt stock ballooned by P2.06 trillion or 26.7 percent which was “attributed to higher funding requirements to respond to the 2019 coronavirus disease (Covid-19) pandemic.”
However, the government’s outstanding debt was better than its P10.16-trillion projection under its Budget of Expenditures and Sources of Financing for the fiscal year 2021.
And because of the Covid-19 pandemic, the country’s debt-to-GDP ratio of 54.5 percent for 2020 was wider than the 39.6 percent at end-2019. It was also up from the 50 percent ceiling set by the government.
“This resulted from the higher financing requirement to address the pandemic alongside a 9.5 percent contraction in the economy for the year,” it added.
The bulk of the liabilities is accounted for by domestic borrowings at P6.694 trillion, while the balance of P3.1 trillion is accounted for by foreign currency-denominated loans.
Despite the increase in the debt-to-GDP ratio, a noted economist said the Philippine government continues to have leeway on that ratio.
In a report, Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said the rise of government debt-to-GDP ratio to 54.5 percent last year from 39.6 percent in end-2019 remains below the international acceptance threshold of 60 percent of domestic output.
The current ratio, he said, gives the government “greater leeway to increase spending, budget deficits, and increase the overall debt stock.”Citing economic managers’ target, Ricafort said the government’s debt-to-GDP ratio target for this year is 58.1 percent or total outstanding liabilities of around P11.982 trillion, while it is targeted to rise further to 59.9 percent in 2022 with the liabilities seen to increase to P13.6 trillion.