MANILA, Philippines – The Philippine government’s outstanding debt is nearing the P13-trillion mark, putting strain on president-elect Ferdinand Marcos Jr.’s fiscal space.

The Bureau of the Treasury on Thursday, June 2, said debt stood at P12.76 trillion as of end-April, 0.7% or P83.4 billion more than in March.

This was due to the issuance of government securities to both local and external lenders, coupled with the depreciation of the peso against the greenback.

Of the total debt stock, 30% was sourced externally while 70% were domestic borrowings.

The current debt level brings the Philippines’ debt-to-gross domestic product (GDP) ratio to over 63%, slightly over 60%, which is considered manageable by multilateral lenders. 

Debt under President Rodrigo Duterte grew partly due to the allocation of funds for infrastructure amid the coronavirus pandemic.

For the country to outgrow its debt, Duterte’s finance chief, Carlos Dominguez III, proposed that Marcos and the incoming economic team implement new taxes, defer scheduled tax reductions, and repeal certain tax exemptions.

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Dominguez’s proposals are estimated to yield P349.3 billion a year.

“Our debt-to-GDP ratio is slightly above the 60% limit. I don’t think that is really a cause for concern because as long as we continue to grow at around 6% to 7% on a sustainable basis, we can easily outgrow our debt,” outgoing central bank head and incoming finance chief Benjamin Diokno earlier said. – Rappler.com