Finance Secretary Benjamin Diokno
MANILA – Finance Secretary Benjamin Diokno said outstanding debt may exceed the PHP14.63 trillion assumption but debt to gross domestic product (GDP) ratio remains to be manageable.
In his weekly press briefing, Diokno said that the right metric for assessing debt is its proportion to economic output.
"Usually, we [assess] the debt as a percent of GDP. It will be around 60-61 percent this year but still manageable," Diokno said.
Diokno said that pre-pandemic, the debt to GDP was around 39 percent.
"It went up because we had to borrow money for medicines, plus revenues went down. But the last number in the first quarter was about 61 percent. And as a result of the pandemic, it's reasonable," he said.
Diokno said the government targets to bring down the debt to GDP to 51 percent by the end of President Ferdinand R. Marcos Jr.'s term.
"By 2028 it's 51.2 and that's a combination of lower debt plus higher GDP," Diokno said.
Economic managers are aiming to achieve 6 to 7 percent economic growth for this year.
For 2024 to 2028, the economy is expected to grow by 6.5 to 8 percent.
"Like I said it also depends on where you put your borrowings. It’s not bad to borrow money. We are using the money for infrastructure, we are expanding the capacity of the economy. And also, productivity-enhancing measures, like improvement of teacher education," added Diokno.
National Treasurer Rosalia de Leon said that in terms of debt, "we're not thinking of it in terms of nominal, but debt to GDP, how we’re managing and using the debt to grow the economy."
She also noted that repayments would help reduce debt.
De Leon added that credit rating agencies are also not concerned about the country's debt.
"We have two visits by credit rating agencies. They are not really concerned by the debt, because they saw that our debt profile continues to be resilient," De Leon said. (PNA)
