General gov’t debt-to-GDP ratio down
The share of the Philippines’ general government (GG) debt to gross domestic product (GDP) went down anew to 34.6 percent at end-December from yearago’s 36.2 percent, an indication the country’s robust economy.
Finance Secretary Carlos G. Dominguez III said the improved GG debt-to-GDP ratio, one of the closely watched indicators by international rating agencies, came despite the rise of total nominal debt to P5.016 trillion from P4.829 trillion in the previous year.
Of the total GG debt, about 58 percent or P2.933 trillion is in the domestic market while the remaining balance of 42 percent or P2.084 trillion is to the offshore markets.
“Despite the increase in level, GG debt-to-GDP ratio continued to improve on the back of careful cash and debt management as well as sturdy economic growth,” Dominguez said.
GG debt covers the outstanding obligations of the National Government (NG), the Central Bank Board of Liquidators (CB-BOL), social security institutions (SSIs) and the local government units (LGUs), excluding the intra-sector debt holdings of government securities including those with the Bond Sinking Fund (BSF).
Dominguez said the rise in the nominal GG Debt was due to the 3.8 percent increase in the consolidated national government debt (net of the Bond Sinking Fund) to P5.456 trillion from P5.256 trillion a year before.
“This was brought about by the net issuance of domestic securities (gross borrowings less redemption); the year-on-year peso depreciation; as well as the decline in BSF holdings,” Dominguez said.
Meanwhile, the debt of the local government unit reached P86.0 billion last year, up by 13 percent from P76.1 billion in the previous year owing to the higher financing utilization of public services and economic enterprises.
The increase in nominal terms, however, was tempered by the intrasector debt holdings which was listed at P526 billion at end-2016, up by 4.5 percent compared to the previous year’s P503.2 billion.
Likewise, the social security institutions increased holdings of Government Securities (P19.5 billion) and LGU loans held by the Municipal Development Fund Office (P3.4 billion) also mitigated the increase in debts.