Finance Minister Benjamin Diokno said on Wednesday that the country’s debt remains “manageable” despite setting a new record at 13.52 trillion pesos by the end of September.
“Let’s put it this way,” Diokno told lawmakers during a Nominations Committee hearing. “It shouldn’t be a cause for concern.”
Government borrowing in the final years of the Duterte administration sent outstanding debts to an all-time high, peaking at a balance of $12.8 trillion by the time then-President Rodrigo Duterte resigned in June.
Almost a trillion pesos has been added the last three months to the presidency of Ferdinand Marcos Jr. In September alone, another 495.54 billion pesos was added to the outstanding government debt, which was attributed to the issuance of government securities and the weakening of the peso.
Despite rising to 63.7 percent of GDP as of the end of September from less than 40 percent before the COVID-19 pandemic, Diokno said the debt-to-GDP ratio remains manageable by international comparison.
“62 percent,” he said, “is very manageable compared to other countries with a debt-to-GDP ratio of 200 percent.”
Government debt has increased by 1.79 trillion pesos since December 2021 and is expected to reach 14.63 trillion pesos by the end of 2023.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., warned earlier this month that the Marcos government could find itself under intense pressure to meet its fiscal goals using tax laws alone.
“In light of the series of record highs in unpaid government debt in recent months, extensive tax collections from existing tax laws may not be sufficient and will inevitably require new tax/fiscal reform measures to be able to limit additional borrowings/debt by means of Debt tally in September The government, especially for the new administration, in light of additional government debt of over 5 trillion pesos since the start of the pandemic/lockdowns in 2020.