Philippine economy
The Treasury attributed the better-than-targeted debt-to-GDP ratio in 2019 to “prudent cash and debt management backed by steady economic growth.”
file
Government debt at record high P7.7-T in 2019
(Philstar.com) - January 29, 2020 - 4:53pm

MANILA, Philippines — The Philippine government’s outstanding debt rose to a new record high of P7.73 trillion in 2019, the Bureau of the Treasury reported Wednesday, saying also that the state’s ability to pay off its loans improved last year.

In a statement, the BTr said the government’s unpaid dues increased by P21.64 billion in December 2019, 0.3% higher than November’s level “due to net availments and exchange rate adjustments.”

In 2019, the country’s debt stock ballooned by 6%, or P438.8 billion, from 2018’s record of P7.29 trillion.

That brought the country’s debt-to-gross domestic product ratio last year to 41.5%, an improvement from 41.9% registered in 2018 and beating the government’s target to reduce it to 41.7% in 2019.

The Treasury attributed the better-than-targeted debt-to-GDP ratio in 2019 to “prudent cash and debt management backed by steady economic growth.”

Debt-to-GDP ratio, which refers to government debt as a percentage of the size of the economy, is one of the closely watched indicators by international credit rating agencies as it demonstrates a country’s ability to pay off its debts. 

A lower debt-to-GDP ratio is generally perceived as favorable — an indicator of a robust economy — as it shows that a country is producing enough to be able to repay its debts.

FROM BUSINESSWORLD: The Philippines’ debt-to-GDP ratio through the years

The Philippine economy grew 5.9% in 2019, missing the government's 6%-6.5% goal for the year after the delayed approval of the national budget hurt state spending.

According to BTr, 33.7% of the country’s total debt last year came from foreign creditors while 66.3% was from local sources. The government borrows from local and foreign sources to fund its budget deficit.

The government is hoping to trim the debt-to-GDP ratio to 38.6% by 2022. — Ian Nicolas Cigaral with a report from BusinessWorld

PHILIPPINE ECONOMY PHILIPPINE GOVERNMENT DEBT
Philstar
  • Latest
  • Trending
Latest
Latest
Are you sure you want to log out?
X
Login

Philstar.com is one of the most vibrant, opinionated, discerning communities of readers on cyberspace. With your meaningful insights, help shape the stories that can shape the country. Sign up now!

FORGOT PASSWORD?
SIGN IN
or sign in with