‘Philippine debt level not cause for concern’

MANILA, Philippines — The country’s debt level is still not a cause for concern and recession is out of the picture given positive indicators pointing to a strong recovery, according to Finance Secretary Benjamin Diokno.

Diokno breezed through the Commission on Appointments yesterday, effectively putting an end to rumors that he is on the way out of the Marcos administration.

No less than President Marcos quashed rumors of Diokno’s alleged exit, calling them “fake news.”

During his confirmation hearing, lawmakers asked Diokno on the status of the country’s debt stock, which is currently at a record P13.52 trillion as of end-September, overshooting the expected obligations of the government by yearend at P13.43 trillion.

Likewise, the country’s debt level, when measured against the gross domestic product (GDP), increased to 63.7 percent in the third quarter.

“Our public debt is manageable. It should not be a cause for concern,” Diokno said.

Diokno said the debt-to-GDP ratio jumped over the past two years due to the pandemic amid the need to procure vaccines, beef up the health system and provide financial assistance.

“The ratio is very manageable compared to other countries whose debt-to-GDP ratio is around 100 or 200 percent,” Diokno said.

Nonetheless, the finance chief said that addressing the ballooning debt would be done by simply outgrowing it through strong economic growth in the coming years.

The economic team is looking at a 6.5 to eight percent GDP growth by 2023 until the end of the Marcos administration’s term in 2028.

“We don’t want to downplay the current Russia-Ukraine war and elevated inflation, but oil prices are starting to go down and the peso is stabilizing. As long as we can grow between 6.5 and eight percent, all these objectives will be achieved,” Diokno said.

He also expressed optimism that the upper end of the 6.5 to 7.5-percent GDP target for 2022 would be met following the surprise third quarter performance of 7.6 percent.

Moving forward, Diokno is banking on the increased priority on agriculture and the renewed interest in mining to boost the economy, on top of the mainstays such as remittances, services and industry.

“I can assure that given the data that we have, even under extreme conditions, we will not have a recession,” Diokno said

“Unemployment is down, industry and manufacturing are working well, we will continue to increase the quality of our overseas workers, so I don’t think we will have a recession,” he said.