Long-term plan on debt sustainability stays – DOF

MANILA, Philippines — The government will stick to its policy of maintaining debt sustainability in the long-term even as it faces a “long battle” with COVID-19 pandemic, Finance Secretary Carlos Dominguez said yesterday.

Speaking before executives of American and Philippine companies during a virtual economic briefing hosted by the Philippine embassy in Washington yesterday, Dominguez said instead of just providing subsidies to affected sectors, the government would continue implementing more reforms that would “restore the economy’s vigor.”

These include the passage of the remaining packages of the tax reform program as well as other laws that will help attract foreign capital, sustaining the infrastructure drive through the Build Build Build Program, and the already ongoing vaccination program.

“We will make sure that these measures will be irreversible and will form the foundation of an inclusive, sustainable and investment-driven economy for the Filipino people,” he said.

The finance chief said the government was able to respond to immediate needs when the pandemic hit last year because of the series of fiscal reforms implemented since the start of the Duterte administration.

The country also entered 2020 with a historic low debt-to-GDP ratio of 39.6 percent, but this has risen to 54.5 percent as unplanned spending was met with a reduction in revenues as lockdowns severely limited business activity.

Dominguez said despite the rise in the debt level, this was “still well-within the prescribed bounds of fiscal viability” and “gives us advantage over other economies that were already saddled with debt before the crisis.”

“In this battle against COVID-19, we are committed to continue striking a delicate balance between providing substantial support to the economy and maintaining our policy of long-term debt sustainability,” he said.