Gov’t debt seen easing to 48% of GDP in 2013


Government economic managers see the national government’s debt stock easing to 48 percent of gross domestic product (GDP) in 2013 as they advance efforts to manage the obligation portfolio.

According to Finance Secretary Cesar V. Purisima, the debt-to-GDP ratio would continue to improve, having settled at 49.5 percent as of end-2011.

The ratio, which peaked at 78.1 percent at the height of the Asian financial crisis in 1998, was at 50.5 percent as of the end of the third quarter last year.

But even as the ratio was going down, the national government’s debt stock continued to increase along with the expanding domestic economy.

In a report to be presented in Wednesday’s economic briefing at the Philippine International Convention Center, Purisima said total outstanding debt was expected to reach P5.8 trillion by year’s end. The amount will mean a 7.4-percent increase from the P5.4 trillion posted at the end of November 2012.

The finance chief added that the budget deficit for 2013 was programmed at a maximum of P241 billion, 6.6-percent higher than the planned ceiling of P235 billion last year.

Compared with the GDP, the deficit is set at 2 percent this year, easing from 2.2 percent in 2012.

In a separate report, Budget Secretary Florencio B. Abad said the government expected revenue to represent 14.7 percent of GDP, while disbursements would account for 16.7 percent.

Abad said government consumption was projected to grow by a double-digit rate because of increased spending for key initiatives like the Pantawid Pamilyang Pilipino Program; priority projects in the health sector such as the doctors to the barrios, expanded immunization, and tuberculosis control; hiring of more teachers to address the shortage, and development projects in conflict-affected areas.

As of November last year, 63 percent or P3.41 trillion of the government’s total debt was borrowed from domestic lenders. Local debt increased by P33 billion or one percent from the P3.37 trillion posted in October.

Foreign obligations accounted for 37 percent or P1.98 trillion of the total outstanding debt. Foreign borrowings decreased by P11 billion or 0.6 percent from the P1.99 trillion owed to overseas lenders in October.

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  • parefrank

    to joboni96

    Do not forget that the surplus of foreign reserves comes from OFW remittances, not from a booming economy. The Philippines depend twice on foreign help, first for loans and then for employing the “exported unemployment” which allows the remittances. And as a thank you to the remitting OFWs, BSP a;;ows the speculation with the peso and the administration uses the overvalued peso for to get the remittances cheap, in pesos. While the peso-cheaper imported goods and services permanent increase in pesos. Where is the profit, with the poor or with the big business which boasts of 20, 30 and more % profit increase.
    Noynoy’s Pro Poor Policy.

  • parefrank

    Look at the European Union. They fight for a debt rate of 3% of GDP.

  • Bright

    so do we have plans of ELIMINATING DEBT? 

    • Joseph

      In the corporate world, companies would like to be in debt IF they can get it cheap. Ford did that in 2007. When the financial crisis happened, they had so much money that they didn’t need a bailout.

      Likewise, our gov’t is making use of the low interest rates to refinance our debt previously at 10% to today’s 5%.

      • Bright

        thank you for that info.. 

        but wouldn’t it be good if we operate at no debt at all? 

  • joboni96

    kung hindi lang hunghang at kolonisadong utak
    mga doctorated financial leaders natin

    nabayaran na natin sana mga utang natin

    $84B (foreign reserves) – $61.7B (foreign debt) = $22 billion left foreign reserves

    still enough foreign reserves left

    this will result to P367 billion more for government projects
    coming from the automatic 20% debt payments in the national budget

    yan ding P367 billion na iyan
    kaya takot at nakikinabang
    ang mga doctorated financial leaders
    sa mga foreign banks and capitalists

    proper time also
    because our western lenders need the money

    mahina rin ang mga senador at congressmen natin

    kung naging project yang P367 billion na iyan every year
    at 30% commission rate
    that’s an additional more than P110 billion commission per year

    more chicks, more lands, more mansions, more businesses etc

    how about it mga honorable sirs

    lets retire our foreign debt

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