Should we start worrying when people in government start asking about who is going to the country’s “soaring debt”?
Lest we forget, we are heading for a national and local elections. All actors at play are bleeding out large amounts of cash, influence, and good will for a six-year term target to manage the country’s affairs, both foreign or national.
MANILA, Philippines — Brought up during budget plenary debates in the Senate was the national debt inventory, which, as of end-September, is at 61.3 percent of the gross domestic product (GDP) or the country’s economic output, according to the latest data from the Bureau of Treasury.
According to Senate Minority Leader Franklin Drilon, the figure has already surpassed the global standard in assessing a country’s ability to pay it debts, which is at 60 percent GDP.
At the same time, the government keeps on borrowing money, left and right, in the name of the pandemic, when it has little time left for the incumbent to address repayment, debt obligations, or debt servicing.
Meanwhile, analysts said debt levels are monitored by credit rating agencies, especially with the COVID-19 pandemic causing the economic downturn.
Senator Juan Edgardo Angara, head of the Senate Finance Committee, stated that governments have the option to spend more on loans in extreme circumstances. He spoke on behalf of the country’s economic managers during the session.
“In normal times, it’s 60 percent of debt percentage of your GDP; but in abnormal times, like now, the IMF (International Monetary Fund) has revised that figure to go up to 70 percent,” Angara explained.
“Most countries now have breached their predicted deficit levels,” he continued.
“I think the goal of Finance Secretary [Carlos] Dominguez and the other economic managers [is] to be somewhere in the middle. Our credit rating is not affected and consumers and the government can still avail of favorable credit terms,” Angara further expounded.
In comparison, during the administration of Gloria Macapagal-Arroyo, the debt-to-GDP ratio as of Q3 (the third quarter) of 2005 was the highest at 65.7 percent, according to the records from the Treasury Bureau.
The percentage of loans compared to the economy will remain within the 60 percent range even as the government incurs more debt as growth expands, Angara disclosed while citing the country’s economic managers.
With outstanding government loans ballooning to ₱11.9 trillion in September after authorities borrowed more to build up on COVID-19 funds, according to Angara, the figure is expected to ease to ₱11.7 trillion by year-end because of net payments.
“Loans (should) go to the productive side of our economy rather than the pockets of corrupt officials,” the minority leader stressed.
In an earlier statement, presidential aspirant Senator Panfilo Lacson said that every Filipino, even “those born today”, is already indebted with ₱220,000 in debt. (RA/JuanManila)