NG outstanding debt by end-2020 would total P8.76 trillion, an 11.63 percent hike from the projected P7.85 trillion by end-2019
Despite the expected spike in national government (NG) debt, which could reach over P8 trillion by end-2020, financing it remains manageable given the prudent and careful planning the NG has undertaken.
This was learned from Department of Finance Undersecretary Gil Beltran as he assured that there is nothing to be worried about with the government’s borrowings as it will be utilized to fund “very good projects,” particularly those listed under the ambitious “Build, Build, Build” program.
“No worries about debt because we are very careful,” Beltran told reporters on the sidelines of the Development Budget Coordination Committee’s budget hearing on Thursday.
Data from the Department of Budget and Management showed that NG outstanding debt by end-2020 would total P8.76 trillion, an 11.63 percent hike from the projected P7.85 trillion by end-2019.
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Also, bulk of the 2020 debt will be sourced locally as domestic borrowings for 2020 was expected to hit P5.77 trillion, while the remaining P2.99 trillion will come from external sources.
According to the Finance executive, despite the 3.2 percent deficit target until 2022, the country’s debt-to-GDP (gross domestic product) ratio remains to traverse a downward trajectory.
“(It’s impact) is very low. Remember, we said that (debt-to-GDP) will be 39 percent by 2022? Right now, it’s 41.9 percent and then it will be 39 percent, so it’s going down. Even with 3.2 percent deficit to 2022, debt ratio will remain at 39 percent,” Beltran explained.
“There is nothing to worry about the debt because we are financing very good projects. If you borrow and you used the proceeds to have a feast, you should start worrying,” he added.
Latest data from the Bureau of Treasury showed that NG debt as of end-July 2019 was slightly lower at P7.80 trillion versus the listed P7.86 trillion in June due to a stronger peso and domestic redemptions.
To recall, Beltran said that the government’s “proactive debt management” enabled the Philippines an expanded fiscal space with the sustained decline in debt levels as percent of GDP.
