Debt-to-GDP ratio improves to 45.1%
The share of debt to the economy improved to 45.1 percent as of end-July due to higher revenue collections and a narrower budget deficit.
“A combination of robust revenues and lower deficit led to the continuing drop in the debt-to-GDP (gross domestic product) ratio to 45.1 percent in July compared with last year’s ratio of 47.1 percent,” Finance Undersecretary Gil S. Beltran said in an economic bulletin released on Wednesday.
The debt-to-GDP ratio as of July, however, was higher than the 44.9 percent posted at the end of the first half.
“Compared with the target deficit equivalent to 2 percent of GDP, the end-July actual deficit of 0.25 percent shall enable government to provide fiscal space to push economic growth to higher levels during the remainder of the year, even with the ongoing global financial volatilities and threats of the El Niño phenomenon,” added Beltran, the Department of Finance’s chief economist.
The end-July deficit dropped by 67 percent to P18.5 billion from last year’s P55.7 billion, which was equivalent to 0.79 percent of the GDP.
During the first seven months, the growth in revenues was faster than the growth in government expenditures.
End-July revenues grew by 14.9 percent year on year to P1.264 trillion, “outstripping the first semester 5.3-percent growth in nominal GDP,” Beltran noted.
“Both tax and non-tax revenues outgrew nominal GDP,” Beltran added, noting that tax revenues rose by 6.8 percent year on year during the period.
Non-tax revenues jumped by 78.6 percent year on year due to the transfer of P60.1 billion in proceeds from privatized coco levy-funded assets to the special account in the general fund, Beltran explained.
The end-July collections of the BIR increased by 8 percent year on year to P824.1 billion, while those of the BOC posted a slower 2.4-percent increase to P208.7 billion as “oil taxes dropped due to lower prices,” Beltran said.
