Gov’t debt payments up 59% in Jan.-Oct. 2023

FILE: Bureau of the Treasury. (Photo: Bureau of the Treasury/Facebook)

MANILA – The debt paid by the national government this year has already amounted to more than P1.47 trillion as of end-October, data from the Bureau of the Treasury (BTr) showed.

Latest data from the BTr showed that the Marcos administration paid a total of PHP1.478 trillion from January to October this year, exceeding last year’s debt payments by 59 percent.

The payments during the period also accounted for about 95 percent of the PHP1.55 trillion programmed debt payments for this year.

Data showed that of the PHP1.47 trillion, more than half or PHP958.9 billion was used to pay principal payments.

The government paid PHP853.94 billion in principal payments to domestic lenders, while PHP105.02 billion was used to pay foreign creditors.

Interest payments, on the other hand, amounted to PHP519.10 billion, bulk of which was paid to domestic lenders.

As of end-October this year, Treasury data showed that the country’s total debt amounted to PHP14.48 trillion.

An economist, however, said the share of the country’s total liabilities to its gross domestic product (GDP), also known as the debt-to-GDP ratio, already fell to its lowest level in two years.

“The national government’s debt-to-GDP ratio as of end third quarter 2023 at 60.2 percent [is] the lowest in about two years [and] down from the 17-year high of 63.7 percent a year before,” Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort told the Philippine News Agency.

“[The debt-to-GDP is] already near the international threshold of 60 percent,” he added.

The debt-to-GDP ratio is the widely used indicator for tracking debt sustainability.

Ricafort said the decline was due to the faster Philippine economic growth in the third quarter of the year.

“The decrease in the said ratio may have been largely brought about by faster GDP growth as the economy reopened further towards greater normalcy,” he said.

Philippine economic growth accelerated to 5.9 percent in the third quarter from 4.3 percent in the second quarter.

“Going forward, the continued growth in the economy or GDP, together with tax and other fiscal reform measures to help further increase structurally tax revenue and other revenue collections of the government, combined with more disciplined government spending, would help further reduce the debt-to-GDP ratio to below the 60 percent international threshold,” Ricafort said.