The General Government (GG) debt as of June 2015 amounted to P4.7 trillion, or a 4.1-percent increase from the P4.5 trillion registered in June 2014, the Department of Finance (DOF) said on Tuesday.
As a percentage of GDP, however, the GG debt as of June 2015 constitutes only 36.2 percent of GDP, down by more than a full-percentage point from the previous ratio of 37.3 percent in June 2014.
In 2009 this ratio of GG debt in relation to the GDP was at 44.3 percent, which went down to 42.2 percent by the end of 2010.
The DOF said this continuing decline in the ratio of GG debt to the country’s GDP indicates an “improving capacity and sustainability of the GG debt.”
“Our general government debt-to-GDP ratio has consistently taken a downward trajectory, since the President prioritized putting our fiscal house in order. Further narrowing reflects how we continue run a tight ship—crucial, especially in sailing through these uncertain times,” Finance Secretary Cesar V. Purisima said in a statement.
The nominal increase in the amount of the GG debt was caused by the increase in the outstanding national government (NG) debt, which increased by P193.2 billion for the period of June 2014 to June 2015.
The DOF explained that the increase in NG debt was due to financing operations and the impact of peso depreciation as against foreign debt, which, up to this time, constitutes 37 percent of the country’s total debt.
The debt of local government units (LGUs), meanwhile, went down by 3 percent to P67.5 billion because of loan repayments and higher revenues collected by LGUs to fund their operating expenses, capital expenditures and debt payments.
Social-security institutions, like the Social Security System (SSS) and the Government Service Insurance System (GSIS), did not contribute to the increase in the GG debt, and instead raised their holdings of government securities by 1 percent of P4.6 billion from the June 2014 level.
GG debt is the total of the outstanding debt of the national government, the Central Bank Board of Liquidators, social security institutions, and local government units, minus intrasector holdings of government securities.
