‘Return to ECQ to cause more MSME closures’
THE Department of Trade and Industry (DTI) warned on Thursday that imposing a strict lockdown measure amid the Covid-19 Delta variant threat will likely increase the number of closed businesses to 16 percent.
Trade Secretary Ramon Lopez said this at a Laging Handa briefing on Thursday following the recent reports about several business groups agreeing on enforcing a hard lockdown to curb the spread of infection. The organizations have since clarified they were not endorsing such measures as this would hurt further the economy.
From the end-2020 level of P6.69 trillion, domestic debt has risen by 18.6 percent.
Meanwhile, external debt already stood at P3.23 trillion, a 12.7-percent climb from P2.86 trillion as of June last year.
External debt as of end-june this year is also now higher by P72.1 billion or 2.3 percent than the P3.16 trillion end-may figure, owing to the impact of local-currency depreciation against the US Dollar amounting to P64.86 billion and net availment of foreign loans, P25.52 billion.
However, the Treasury said these were tempered by the P18.27-billion decrease in the peso value of debt denominated in other currencies such as the euro and Japanese yen due to currency appreciation. Nonetheless, external debt was up by 4.1 percent from P3.1 trillion as of end-2020.
As of June, total guaranteed debt of the national government slipped by 4.7 percent year-on-year to P438.6 billion from P460 billion.
Likewise, it was also down by 4.3 percent from P458.35 billion as of end-2020.
Month-on-month, total guaranteed obligations rose by P12.01 billion or 2.8 percent from P426.59 billion as of end-may following the net availment of domestic guarantees amounting to P11.07 billion and the impact of local-currency depreciation amounting to P3.98 billion.
Rizal Commercial Banking Corporation (RCBC) economist Michael Ricafort said outstanding debt continued to rise to cover wider budget deficit in recent months brought by government expenditures exceeding its revenues.
For the coming months, Ricafort sees a further pickup in debt as the government needs to spend more on infrastructure and purchase of Covid-19 doses.
“The increase in the government’s debt would still remain sustainable in the coming years for as long as the debt-to-gdp ratio remains around 60 percent, which is considered an important international threshold,” Ricafort said.
This year, the national government programmed to borrow a total of P3.1-trillion, of which around 75 percent is expected to be raised through domestic sources.
Last week, Finance Secretary Carlos G. Dominguez III said the debtto-gdp ratio this year is projected to rise to 59.1 percent from 54.6 percent in 2020. It is also expected to peak next year at 60.8 percent— slightly above the internationally accepted threshold— before gradually tapering off to 60.7 percent and 59.7 percent in 2023 and 2024.