Senate Minority Leader Aquilino Pimentel III on Tuesday expressed alarm over the escalating national debt, which is expected to reach P15.8 trillion by the end of 2024.
Pimentel warned this will burden every Filipino with a staggering debt load of P141,000.
Sen. Imee Marcos also said the country’s debts “keep on surging even if the COVID-19 pandemic is over.”
At the height of the pandemic, Marcos noted the government obtained a P2.74-trillion loan to bankroll the procurement of COVID-19 vaccines.
Pimentel said: “How come Filipinos should not worry about their ballooning debt?”
He noted that the principal and debt payments are also ballooning and, yet, the total amounts to be paid are rising too.
During the briefing of the Development Budget Coordination Committee on the proposed P5.768-trillion budget outlay for 2024, Pimentel questioned the administration’s economic managers regarding debt servicing.
Specifically, he called for a thorough dissection of the amounts involved.
For 2024, the government has set aside a staggering P1.9 trillion for debt principal and interest payments, with P1.2 trillion designated for the principal and approximately P670.5 billion for interest payments.
Pimentel noted that the P1.9 trillion accounts for 32.94 percent of the budget for next year.
The nation’s total debt has reached P14 trillion as of May 2023, with an average interest rate of around 5% as disclosed by the National Treasurer prompted by Pimentel’s probing.
According to economic managers, the country’s debt is equivalent to 61% of its gross domestic product or GDP.
While this debt-to-GDP ratio does not seem to alarm the economic managers, Pimentel said he was deeply concerned.
The current debt-to-GDP ratio stands at 61%, while that of its neighboring countries such as Malaysia and Thailand at 61.57% and Singapore at 167% of GDP, as mentioned by the National Treasurer.
The best proof that we are putting our debts to wise expenditures would be if we are able to bring down the absolute level of our debt,” Pimentel insisted, rather than seeking solace solely in the debt-to-GDP ratio.
“I hope the actual financial situation of the country will be explained to the people,” he added.
Meanwhile, Pimentel also scrutinized the unrealistic poverty threshold set by the National Economic and Development Authority (NEDA).
NEDA Secretary Artemio Baliscan said that the standard for a family of five is P12,000 per month, which means if a family of 5 is making less than P12,000, then they are living below the poverty threshold.
But for Pimentel, the NEDA’s standard is too low.
“The 12,000 standard is even below the current minimum wage,” Pimentel said as he reiterated his call for a higher minimum age.
“There must be some sense in fixing the minimum wage to live decently,” Pimentel said.
The Senate fiscalizer thus called on economic managers to conduct a thorough review of the entire process to establish a more realistic poverty threshold and to accurately assess national poverty.