The share of consolidated general government (GG) debt to the country’s GDP rose to 37.2 percent as of third quarter of 2019 from 36.3 percent in the same period in 2018.
Based from the data of the Department of Finance, the country’s consolidated general government debt stood at P6.79 trillion as of September 2019, 10.4 percent higher than the P6.15 trillion recorded as of the same quarter the previous year.
However, general government debt as of end-September 2019 declined by 0.4 percentage point from the debt-to-GDP ratio of 37.6 percent recorded as of end-June.
Consolidated general government debt as of third quarter 2019 was also up by 0.3 percent from the second-quarter level of P6.77 trillion.
General government debt includes the outstanding debt of the national government, Social Security Institutions and local government units minus intra-sector debt holding of government securities including those held by Bond Sinking Fund (BSF).
Debt-to-GDP ratio is used to gauge a country’s ability to pay off its debt.
Of the total debt, P4.21 trillion or 62 percent came from domestic borrowings while the remaining P2.58 trillion or 38 percent consist of external loans.
National government debt, net of the BSF, reached P7.32 trillion as of end-September 2019, increasing by 0.2 percent from the second-quarter level of P7.31 trillion.
This is also 9.9 percent higher than P6.66 trillion in the same period in the previous year.
As of third quarter 2019, domestic debt dropped by 1.3 percent to P4.73 trillion from P4.796 trillion as of second quarter.
On the other hand, external debt inched up by 3 percent to P2.58 trillion compared with P2.51 trillion as of end-June.
Local government debt as of third quarter also went up by 2.3 percent or P105.20 billion from P102.80 billion as of second quarter. Local government debt as of September 2019 also surged by 17.3 percent from P89.7 billion in the same period in the previous year.
GSIS, SSS
Social Security Institutions, such as the Government Service Insurance System (GSIS) and the Social Security System (SSS) did not contribute to the debt stock, but simultaneously decreased their intra-sector holdings of Government Securities by 0.3 percent compared with the second quarter of 2019.
As of end-2019, national government’s outstanding debt rose by 6 percent to P7.73 trillion from P7.29 trillion in 2018.
The Philippine Statistics Authority recently rebased the National Accounts of the Philippines. Using 2018 as the base year, nominal GDP increased by 4.9 percent for 2019, reducing the debt-to- GDP ratio to 39.6 percent for the period from the previously released 41.5 percent.
Latest data from the Bureau of the Treasury data showed that the national government’s outstanding debt surged to P8.177 trillion as of end of the first quarter of 2020, going up by 4.8 percent from P7.802 trillion in the same period in 2019.
National Treasurer Rosalia V. de Leon said the adjusted debt-to-GDP ratio for this year would be 44.95 percent considering the rebasing. This is comparable to the earlier projection by the Cabinet-level Development Budget Coordination Committee of 46.7 percent debt-to-GDP ratio for the year.
Finance Secretary Carlos G. Dominguez III earlier said the country’s debt-to-GDP ratio would increase to 46.7 percent this year from 41.5 percent in 2019 as the country needs to borrow more to finance its response to Covid-19.
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