THE country’s consolidated general government (GG) debt as a share of the economy as of end-2019 dropped to 34.1 percent from 34.4 percent in 2018.
In a statement over the weekend, the Department of Finance (DOF) said the consolidated GG debt-to-GDP ratio last year was down by 0.3 percentage points compared to the 2018 level, partly because of the decline in national government debt-to-GDP ratio from 39.9 percent in end-December 2018 to a record-low 39.6 percent in the same period last year.
According to DOF, prudent cash and debt management as well as the steady growth of the country’s economy led to the drop in the national government debt-to-GDP ratio in recent years.
This, despite GG debt rising by 5.9 percent to P6.65 trillion last year from P6.28 trillion in 2018. GG debt includes outstanding debt of the national government, social security institutions and local government units minus the intra-sector debt holding of government securities, including those under the Bond Sinking Fund (BSF).
Of the total GG debt stock, the bulk or 61.8 percent (P4.11 trillion) was domestic borrowings while 38.2 percent or P2.54 trillion was made up of external borrowings.
Meanwhile, national government debt net of the BSF climbed by 5.6 percent to P7.17 trillion last year from P6.79 trillion in 2018.
Both domestic and external debt also grew by 6.6 percent and 3.7 percent, respectively, compared to 2018 levels.
Local government debt also increased by 13.8 percent or P13 billion from that of 2018.
While not contributing to the debt stock, social security institutions such as the Government Service Insurance System and Social Security System increased their holdings of government securities by 3.1 percent compared to the 2018 level.
For this year, the Cabinet-level Development Budget Coordination Committee (DBCC) expects the country’s national government debt-to-GDP ratio to surge to 49.8 percent from 39.6 percent last year.
Despite the projected increase in the country’s debt-to-GDP ratio this year, economic managers had said this is still far lower than the most recent peak of 71.6 percent in 2004.
For 2021 and 2022, the DBCC also sees even higher debt-to-GDP ratios of 51.5 percent and 52.3 percent, respectively.
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