PH Closed 2022 With ₱13.42-T Debt

The Philippines incurred an outstanding total debt of P13.418 trillion at end-2022, up by 14.4% from end-2021’s P11.728 trillion, the Bureau of the Treasury (BOT) reported.

Photo Insert: Of the total outstanding debt, 68.6% is domestic debt worth P9.208 trillion while external debt was at P4.210 trillion or 31.4% of total debt.

The Department of Finance’s (DOF) attached agency said that for the month of December versus November, the National Government (NG) debt was slightly lower by 1.7% or from P13.644 trillion due to the peso appreciation and the net redemption of domestic government securities.

DOF Secretary Benjamin E. Diokno said on Feb. 3, Thursday, that the debt-to-GDP ratio, despite the higher total NG debt, is still lower at 60.9% in 2022 against the 61.8% target under the Medium-Term Fiscal Framework (MTFF).

“Our medium-term fiscal plan and exemplary GDP growth have allowed us to outpace our borrowings. This gives us confidence that we can reach our targets by 2025,” Diokno.

The government is aiming to bring down the debt-to-GDP ratio to less than 69% by 2025 and further down to 51.1% by 2028, as well as to reduce the deficit-to-GDP ratio to three percent by 2028 and to maintain high infrastructure spending at 5-to-6 percent of GDP annually, said the DOF.

In a statement, the DOF said its debt management strategy prefers more domestic market borrowings over external sources to minimize foreign exchange risk. Fluctuations in exchange rates run the risk of increasing debt service payments each time the peso depreciates, it added.

The debt-to-GDP ratio of 60.9% for 2022 was an improvement from 63.75% in end-September last year. Of the total outstanding debt, 68.6% is domestic debt worth P9.208 trillion while external debt was at P4.210 trillion or 31.4% of total debt.

Last year, guaranteed obligations increased by P11.1 billion or 2.8 percent month-over-month to P399.05 billion. The DOF said this was because of the net availing of domestic guarantees and the net effect of currency fluctuations, which increased the value of external guarantees.

The guaranteed debt was 5.9% lower than the 2021 level of P423.92 billion.

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