THE country’s debt-to-gross domestic product (GDP) slightly eased in the second quarter of the year, but remained above the internationally-recommended 60-percent threshold for a healthy economy.
Latest data released by the Bureau of the Treasury (BTr) showed that the Philippines’s debt-to-GDP ratio hit 62.1 percent in the second quarter of the year.
While this is down from the first quarter’s 17-year high of 63.5 percent debt-to-GDP ratio, it is the second consecutive month this year that the country has exceeded the 60-percent recommended threshold for an economy.
In 2021, the economy also ended the year with an above-threshold debt ratio of
Broken down, domestic debt as a ratio of GDP also went down from 44.4 percent in the previous quarter to 42.6 percent for April to June this year.
External debt as a ratio of GDP, meanwhile, slightly increased at 19.5 percent for the second quarter from the 19.1 percent in the previous quarter.
Just last month, the new Finance Secretary Benjamin Diokno said they expect the national government’s debt-to-GDP ratio to go down to 52.5 percent by the end of the Marcos Jr. administration in 2028.
“In other words, by the end of the Marcos years, we expect the national debt-to-GDP ratio to be below 60 percent which is the old threshold,” Diokno earlier said after DBCC’s first meeting under the Marcos administration.
For this year, however, the national government still expects the debt ratio to exceed the 60-percent threshold, with a target of 61.8 percent by the end of the year.
The record-low prepandemic level of 39.6 percent was posted in 2019.
Diokno earlier brushed off the relatively high debt-to-GDP ratio of the country, saying the current level is “not a cause for concern,” especially when compared to other emerging economies.
“That’s really nothing to worry about. The way out of this is by growing at a faster rate. We have to simply outgrow our debt,” Diokno said.
The Philippine Statistics Authority (PSA) reported on Tuesday that the country’s GDP growth slowed down at 7.4 percent in the second quarter of the year, from the revised 8.2 percent in the previous quarter.
This is the slowest growth of the country in three quarters.