Debt-to-GDP ratio down to 42.92% in 1st half

The share of the national government’s debt to the economy further declined to 42.92 percent at the end of the first half on the back of sustained robust gross domestic product (GDP) growth in the second quarter, the latest Department of Finance data showed.

The end-June debt-to-GDP ratio was lower than the 43.41 percent recorded a year ago, although slightly higher than end-2016’s 42.06 percent, Finance Undersecretary and chief economist Gil S. Beltran said.

The share of debt was at 44.69 percent and 45.5 percent of the economy in 2014 and 2015, respectively.

In an economic bulletin, Beltran noted that the 6.5-percent GDP expansion in the second quarter, even without the boost from election-related spending unlike last year, still made the country among the fastest-growing in the region during the April to June period.

“The country’s strong macroeconomic fundamentals such as stable prices and manageable debt levels will continue to provide the enabling environment conducive for growth. These should be coupled with structural reforms that will further enhance the country’s growth prospects,” Beltran said.

“To increase the country’s potential and actual growth rates to at least 7 percent, it is very important that the comprehensive tax reform program and anti-red tape initiatives be implemented. These are game-changing reforms that can untangle the structural rigidities in the economy. These can unleash the economy’s growth potential and usher in an unprecedented era of sustainable and inclusive investment-led development,” Beltran added.

The government targets 6.5-7.5 percent GDP growth this year. —BEN O. DE VERA