The Finance Department shrugged off concerns from some quarters over a potential debt crisis, saying the latest favorable numbers suggest otherwise.
“Proactive debt management has afforded the Philippines an expanded fiscal space as the level of debt has declined significantly from 87.2 percent of GDP [gross domestic product] in 2006 to 41.8 percent in 2018″•a 45.4-percentage-point decline,” Finance undersecretary Gil Beltran said in an economic bulletin on Thursday.
He said net debt showed a bigger decline from 84.8 percent of GDP to 37 percent”•a 47.8-percentage-point decline during the same period.
“In general, first-quarter 2019 debt statistics show a continuation of the favorable trend toward debt reduction. These favorable numbers indicate that fears of a forthcoming debt crisis are unfounded,” Beltran said.
The national government debt-to-GDP ratio rose from 42.6 percent as of end-March 2018 to 44 percent as of end-March 2019 because of higher domestic debt. External debt dropped from 14.9 percent to 14.7 percent while domestic debt rose from 27.6 percent to 29.3 percent as the government shifted to local sources of borrowing to reduce foreign exchange risks.