Public sector debt declines

The government’s debt stock declined in September last year, latest data showed, as state-owned banks and corporations continued to clean up their books.

Data from the Department of Finance (DOF) showed that the country’s outstanding public sector debt (OPSD) fell to the equivalent of 66.6 percent of the economy at the end of the third quarter of 2013.

This was an improvement from 70.9 percent of gross domestic product (GDP) in 2009 before the start of the Aquino administration. It was also better than the 70.2 percent at the end of June last year.

Not only did the level of debt relative to GDP go down, but the absolute amount of the government’s debt eased to P7.5 billion from P7.7 billion in the first semester.

Total domestic debt of the public sector decreased by 3.8 percent to P5.3 trillion representing 71 percent of total public sector debt, while foreign debt also decreased by 1 percent to P2.2 trillion, accounting for 29 percent of total public sector debt.

The decline in the OPSD was due to the decrease in the outstanding debt of the nonfinancial public sector.

In particular, the foreign debt stock of the 14 Monitored Non-financial Government Corporations (MNFGCs), which form part of the nonfinancial public sector debt, declined by 1.7 percent.

Moreover, there was also a decline in the financial public corporations’ outstanding debt by 2.1 percent.  The Bangko Sentral ng Pilipinas (BSP) debt decreased by 2.2 percent.

Government financial institutions, namely Development Bank of the Philippines, Land Bank of the Philippines, and Trade and Investment Development Corp. of the Philippines, registered a more notable decrease when their outstanding debt stock declined by 16.5 percent during the period.