MANILA, Philippines — Even as the government has been borrowing more than usual this year due to the COVID-19 pandemic, the Philippines’ debt remains “manageable” and “affordable,” the Department of Finance (DOF) said Wednesday.
In a pre-State of the Nation Address forum, Finance Secretary Carlos Dominguez said the government is eyeing to borrow up to 50 percent of the gross domestic product (GDP)—higher from the 39 percent debt to GDP ratio in 2019.
Dominguez said the target debt to GDP ratio is still “very affordable mainly because the cost is very low.”
“The interest rate that we are paying on our debt is quite historic lows and one of the reasons is that our credit rating is very good. So we are planning to borrow up to 50% of the GDP. Up from 39 percent at the end of 2019,” Dominguez said.
“The repayment will come from our taxes in the future. And our taxes will come from healthier Filipinos working from returned economic growth starting next year. So the debt is very manageable and it is affordable for us,” he added.
The ongoing health crisis has forced the government to borrow a total of P1.22 trillion from January to April—exceeding the P1.02 trillion in gross borrowings for the entire 2019.
According to Dominguez, the government has so far spent P375 billion for its COVID-19 response.