Gov’t debt burden seen nearing P6T

Finance Secretary Cesar V. Purisima: Positive moves from credit raters. INQUIRER FILE PHOTO

Economic officials of the Aquino administration said Wednesday the national government’s outstanding debt was expected to approach the P6-trillion mark by the end of 2013 after breaching P5 trillion just recently.

Finance Secretary Cesar V. Purisima and Budget Secretary Florencio B. Abad, representing the Development and Budget Coordination Committee in a briefing for the House committee on appropriations, said the debt stock would hover at P5.78 trillion to P5.91 trillion within a year and a half.

As of last May, the debt stock reached P5.15 trillion and, based on the 2012 fiscal program, this will reach P5.52 trillion by year’s end.

In his presentation, Abad said that under the proposed national expenditures program for 2013, the debt stock would continue to rise although this would represent an even smaller part of the domestic economy.

Abad said P5.91 trillion would account for 49.5 percent of gross domestic product in 2013, a lower ratio than the expected 50 percent this year and the recorded 50.9 percent in 2011.

On the other hand, Purisima put the expected debt stock at P5.78 trillion, noting that international credit-rating agencies have given the Philippine positive moves eight times since the Aquino administration came into power in mid-2010.

Malacañang officials have bandied about this, saying that improving credit standing would mean less financing costs for the country.

According to the Bureau of the Treasury, the government spent P362.19 billion in the first semester to pay its debt, down 11 percent from the P408.77 billion settled in the same period last year.

The government continued to spend less for debt servicing compared with the previous year as principal payments fell during the period.

From January to June, the government settled P212.18 billion in principal, including P181.38 billion in domestic debt and P30.8 billion in foreign loans. Total principal payment in those six months was 23 percent lower than the P274.27 billion posted in the year-ago period.

The government paid P150.01 billion in interest, covering P96.8 billion in domestic debt and P53.21 billion in foreign borrowings.