Gov't debt stands at 36.8% of GDP in September
Prinz Magtulis (Philstar.com) - December 21, 2015 - 11:11pm

MANILA, Philippines - The broadest measure of the government's debt standing inched up in the third quarter from the previous three months, but remained down from last year.

In a statement on Tuesday, the Department of Finance (DOF) said the general government debt accounted for 36.8 percent of gross domestic product (GDP) as of September.

The figure was up slightly from 36.2 percent as of end-June, but was still an improvement from 37.2 percent in the same period a year ago.

General government debt is wide measure of debt levels across the bureaucracy, including that of the National Government, local governments, and social security institutions such as the Social Security System and Philippine Health Insurance Corp.

A lower ratio indicates the government is generating more resources than debts, giving it more payment capacity. GDP is the sum of all goods and services gauging economic output.

Based on DOF figures, the decrease in the ratio could be traced from faster economic growth than debt accumulation in the first nine months.

In absolute amounts, general government debt rose 5.1 percent to P4.8 trillion from P4.6 trillion last year. GDP grew by a faster 5.8 percent during the period.

"Keeping this ratio down is part and parcel of our commitment to keeping the Philippines resilient. We can expect the downtrend to persist further," Finance Secretary Cesar Purisima was quoted as saying.

According to the DOF, the debt stock rose because of an additional national and local government debts from January to September.

Broken down, national government debt rose by an aggregate P238 billion with local and foreign obligations up 4.9 percent and 4.5 percent, respectively.

The DOF said domestic national government debt rose due to higher issuances of government securities, while their foreign counterparts rose due to peso depreciation.

A weaker peso, which lost around 5 percent this year against the dollar, drives debtors to shell out more local money to pay for their debts in other currencies.

Meanwhile, local government debts rose 1.4 percent as of September due to "higher loan availments," the agency said.

General government debt is one of the metrics being looked at by credit rating agencies in evaluating the country's credit standing.

A higher credit standing - or an investment grade rating - means the Philippines is able to borrow money at lower interest.

The Philippines is rated investment grade by major debt watchers.

DEBT DEBTS DEPARTMENT OF FINANCE DOF FINANCE SECRETARY CESAR PURISIMA GOVERNMENT LOCAL NATIONAL GOVERNMENT PERCENT ROSE SOCIAL SECURITY SYSTEM AND PHILIPPINE HEALTH INSURANCE CORP
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