Public sector debt-to-GDP ratio down to 55.8%
The country’s public sector debt as a proportion of its Gross Domestic Product (GDP) declined to its lowest levels since 1998 in the third- quarter last year, the Department of Finance (DOF) said yesterday.
According to the DOF, the combined outstanding liabilities of the national government, local government units (LGUs) and state-owned firms reached 7.3 trillion as of September, 2015, or 55.8 percent of GDP.
The end-September last year debt-toGDP is lower by 4.5 percentage points from 60.3 percent in the same period in 2014.
“This figure marks the lowest outstanding public sector debt (OPSD) debt-to- GDP ratio ever since the earliest comparable period of 1998,” the finance department noted.
OPSD covers the general government debt, borrowings of both the 14 non-financial public corporations and the financial public corporations, less the intra-sector debt holdings.
“We will continue to closely monitor government- owned and controlled corporation GOCC debt to ensure they remain healthy and resilient from external volatility,” Finance Secretary Cesar V. Purisima said in a statement.
“Over the past six years we have seen our GOCCs get their acts together. As long as there's still room for improvement, you can expect the government to continue pushing for progress,” he added.
Meanwhile, DOF noted an increase in general government debt which includes the national government, central bank board of liquidators, social security institutions and LGUs net the intra-sector debt holdings.
But despite the increase in general government debt, the OPSD still ended in a lower level as of September, 2015 as compared to last year.
Purisima said this is mainly due to higher national government/GOCC deposits with the state financial institutions and the corresponding increase in deposits with the Bangko Sentral ng Pilipinas.
In addition, there was a drop in the outstanding obligations of the 14 monitored GOCCs, the DOF said.
The shift in the NG/GOCC deposits to the GFIs is a demonstration of compliance to Department Circular 00-2015 issued in June, 2015.
The circular requires all NGAs, GOCCs, and LGUs to maintain their accounts with the GFIs as part of the Government’s effort to strengthen its overall fiscal position. The increase in GFI deposits was also driven by their commitment to the GCG to increase their deposits from the private sector.
On the other hand, the 81.4 billion decrease in the non-financial public corporations’ debt primarily emanates from PSALM as a result of its improved liquidity position.
The combined borrowings of financial and non-financial public corporations as a share of GDP, has declined to 19 percent from 23 percent of last year due to a sturdy economic growth.
The OPSD ended with a mix of 68.9 percent sourced from domestic creditors and the remaining 31.1 percent from external creditors as of end-September, 2015.