QUEZON CITY, (PIA) -- The Department of Finance (DOF) reported that the country’s recorded debt-to-GDP (Gross Domestic Product) ratio is at 60.9% for the end-2022.
The said ratio is lower than the 61.8% target set in the Medium-Term Fiscal Framework (MTFF) according to DOF.
“Our medium-term fiscal plan and exemplary GDP growth have allowed us to outpace our borrowings. This gives us confidence that we can reach our targets by 2025,” Finance Secretary Benjamin Diokno stated.
The comprehensive plan MTFF serves as the government’s blueprint to steer the economy back to its high-growth trajectory. Through this, the National Government (NG) aims to bring down the debt-to-GDP ratio to less than 60% by 2025 and further down to 51.1% by 2028; reduce the deficit-to-GDP ratio to 3.0% by 2028; and maintain high infrastructure spending at 5% to 6% of GDP annually.
Meanwhile, the NG’s total outstanding debt also took a favorable decrease by 1.7% or P225.3 billion in December 2022 according to DOF. This is because of the rise in the value of the local currency and the net sale of domestic government bonds.
Furthermore, the country’s debt management strategy prioritizes the domestic market over external sources to protect the country against foreign exchange risk. Changes in exchange rates could make debt service payments more expensive every time the peso falls.
DOF also stated that out of the P13.4 trillion total outstanding debt as of end-2022, domestic debt accounted for P9.2 trillion or 68.6% of the total debt stock, while external debt made up the remaining P4.2 trillion or 31.4% of the total debt stock.
On the otherhand, the Philippines' total guaranteed obligations went up by P11.1 billion, or 2.8%, Month-over-Month (MoM) to P399.1 billion. This was caused by the net availment of domestic guarantees and the net effect of currency fluctuations, which increased the value of external guarantees.
In comparison to the end-December 2021 level, the total NG guaranteed debt dropped by P24.9 billion or 5.9%. (PIA-NCR)
