PH loans ease to ₱11.72 trillion in end-2021; debt-to-GDP ratio highest in over 15 years

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Metro Manila (CNN Philippines, February 1) — The country’s outstanding debts slid to ₱11.72 trillion as of end-December as authorities paid out local securities, latest figures of the Bureau of the Treasury showed.

The figure is ₱203.28 billion lower than end-November, the bureau said on Tuesday. On an annual basis, the national debt stock grew by 19.7%.

The latest tally yielded a debt-to-gross domestic product (GDP) ratio — or percentage of loans to the total economy — of 60.5%, the highest since the 65.7% reported in 2005 under the administration of Gloria Macapagal-Arroyo.

Still, the Treasury assured this is “within the accepted sustainable threshold as the economy continues to recover from the effects of the pandemic.”

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Domestic loans comprised ₱8.17 trillion of the total debt stock by the end of last year, outpacing end-November’s ₱8.44 trillion.

The agency said this came “as the repayment of the ₱540 billion provisional advance from the BSP (Bangko Sentral ng Pilipinas) outpaced the net issuance of government securities.”

External debts, meanwhile, stood at ₱3.55 trillion — slightly up from ₱3.49 trillion the month prior.

“For December, the increment in external debt was attributed to the impact of peso depreciation against the USD amounting to ₱40.87 billion and the net availment of external obligations amounting to ₱33.83 billion,” explained the Treasury, adding it more than offset the effects of foreign currency adjustments worth ₱6.89 billion.

The government’s guaranteed payments reached ₱423.91 billion as of end-December, up ₱6.07 billion from November.

“The higher level of guaranteed debt was due to the net availment of domestic guarantees amounting to ₱5.99 billion and the effect of Peso depreciation against the USD amounting to ₱2.68 billion,” said the Treasury.

RCBC chief economist Michael Ricafort said the country’s debt-to-GDP ratio could still be sustained around the international 60% threshold with faster economic growth expected this year, along with its overall fiscal performance.

This could be the case “given the conservative/prudent stance on any additional stimulus measure that need to be supported by new government revenue sources, thereby could help curb the budget deficit and debt-to-GDP ratio, going forward,” he said.

Economic managers, through Senate Finance Committee chairman Sonny Angara, assured during November’s budget plenary debates that the country’s debt-to-GDP ratio will be kept within the 60% range even with more debts incurred as growth rises.