Total government debt increased by 4.5 percent in 2013 to P5.68 trillion as it continued to rely on domestic and foreign borrowings to help fund its expenditures, according to the Department of Finance.
The DOF said, however, that the outstanding government debt remained manageable as the increase was slower than the growth of the economy last year.
The economy grew year-on-year by 9.28 percent in nominal terms to P11.55 trillion in 2013.
In real terms, or when inflation is factored in, the economy grew by 7.2 percent, the second-fastest in Asia next to China.
With the manageable increase in the government’s liabilities, the debt-to-gross domestic product (GDP) ratio, measured in nominal terms, last year fell to 49.21 percent from the previous year’s 51.5 percent.
This was the first time that the government registered a debt-to-GDP ratio below 50 percent.
The sustained drop in the ratio, which peaked at 76 percent in 2004, was credited for helping the Philippines secure investment grades last year.
“Our fiscal situation remained favorable,” Finance Secretary Cesar Purisima told reporters Tuesday on the sidelines of an economic forum organized by Euromoney.
Of the total debt in 2013, DOF data showed that the bulk represented local borrowings at P3.73 trillion, an increase of 7.6 percent year-on-year.
The smaller portion of P1.95 trillion was accounted for by foreign borrowings. This was down year-on-year by 1.1 percent.
Domestic borrowings were composed of funds generated from the sale of treasury bills and bonds in the monthly auctions for short- and long-term government securities.
Foreign borrowings were made up of loans obtained from multilateral, development institutions led by the Japan International Cooperation Agency, Asian Development Bank and the World Bank. These are also composed of proceeds from sale of government bonds in the international capital market.