National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said on Thursday that the country’s debt remains under control amid reaching an all-time high of P15.18 trillion in February.

When asked about the state of the country’s debt in a Palace briefing, Balisacan emphasized that the Philippines is in a favorable position.

“Oh, yes it is (still in control). We are actually in a very good position,” Balisacan said.

Higher local borrowings

The Bureau of Treasury (BTr) said on Wednesday that the country’s debt increased in February due to higher local borrowings and higher interest rates.

According to figures from the BTr, the total debt of the national government increased by 2.63 percent month-on-month from the P14.8 trillion recorded in January.

The Treasury explained that the uptick in the country’s debt was primarily due to the issuance of domestic debt, although it was somewhat offset by the impact of the stronger peso on the valuation of foreign debt.   

However, Balisacan pointed out that according to the rule of thumb for emerging economies, a debt-to-gross domestic product ratio of 70 percent is considered a threshold.

Far below the threshold

However, he said the Philippines is currently far below this threshold, with the ratio set to decrease even further.

Balisacan said the debt-to-GDP ratio will decline from 60.2 percent in 2023 before settling at 55.9 percent in 2028, well within the internationally accepted threshold of 70 percent, as recommended by the International Monetary Fund.

“We are moving from 60 percent which is way below 60 to even lower of 55 — almost about 56 percent by the time we end the term of the current President,” Balisacan said.

“So, we are not only way below the threshold but we also want to decrease that further,” he added.

Government data as of end-2023 showed that the country’s debt-to-gross domestic product (GDP) ratio stood at 60.2 percent, showing a slight increase from the 60.9 percent recorded at the end of 2022.