(Source: By Ronnel W. Domingo, Asia News Network (MCT) – Manila (Philippine Daily Inquirer/ANN) – Economic officials of the Philippine administration yesterday said the national government’s outstanding debt was expected to approach the 6-trillion peso (US$143 billion) mark by the end of 2013 after breaching 5 trillion pesos just recently.
Finance Secretary Cesar V. Purisima and Budget Secretary Florencio B. Abad, representing the Development and Budget Coordination Committee in a briefing for the House committee on appropriations, said the debt stock would hover at 5.78 trillion pesos to 5.91 trillion pesos within a year and a half.
As of last May, the debt stock reached 5.15 trillion pesos and, based on the 2012 fiscal programme, this will reach 5.52 trillion pesos by year’s end.
In his presentation, Abad said that under the proposed national expenditures programme for 2013, the debt stock would continue to rise although this would represent an even smaller part of the domestic economy.
Abad said 5.91 trillion pesos would account for 49.5 per cent of gross domestic product in 2013, a lower ratio than the expected 50 per cent this year and the recorded 50.9 per cent in 2011.
On the other hand, Purisima put the expected debt stock at P5.78 trillion, noting that international credit-rating agencies have given the Philippine positive moves eight times since the Aquino administration came into power in mid-2010.
Malaca?ang officials have bandied about this, saying that improving credit standing would mean less financing costs for the country.
According to the Bureau of the Treasury, the government spent 362.19 billion pesos in the first semester to pay its debt, down 11 per cent from the 408.77 billion pesos settled in the same period last year.
The government continued to spend less for debt servicing compared with the previous year as principal payments fell during the period.
From January to June, the government settled 212.18 billion pesos in principal, including 181.38 billion pesos in domestic debt and 30.8 billion pesos in foreign loans. Total principal payment in those six months was 23 per cent lower than the 274.27 billion pesos posted in the year-ago period.
The government paid 150.01 billion pesos in interest, covering 96.8 billion pesos in domestic debt and 53.21 billion pesos in foreign borrowings.
* 1 dollar = 41.8 pesos
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Why has the Philippines’ debt burden ballooned to this level? Did tax collections in the Philippines decrease to some extent, which then prevented the government from repaying the country’s debt to international agencies? Did the PHP21,000,000,000.00 (USD1:PHP41.50) conditional cash transfer program under the Aquino administration affect the government’s debt service plan? Does the Aquino administration intend to defer loan repayments, for the next administration to worry about? Barring legal impediments, the Philippine government’s controversial contribution or loan of USD1,000,000,000.00 to the IMF should have been used to reduce the burgeoning interest-laden debt. Wishful thinking?
William Russell Sobrepena(Quote) (Reply)
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