The Department of Budget Management has assured that debt servicing shall not hamper the implementation of the government’s priority programs and projects, saying debts have been put to good use.
“Debt-servicing is expected to stabilize and decline over the near term, consistent with the Marcos Jr. administration’s fiscal consolidation plan of reducing national government debt-to-GDP ratio of 51.1 percent,” said Budget Secretary Amenah Pangandaman in a statement Tuesday.
She said the plan is anchored on its medium-term fiscal framework.
“The projected decline in debt-to-GDP ratio will continue to be supported by a growing economy, which in turn is stimulated by the government’s annual budget for its economic transformation for inclusive and sustainable prosperity,” she explained.
Pangandaman said the fiscal year 2023 National Expenditure Program, for instance, allocates only 11 percent (P582 billion) for interest payments (for its debt).
“The much bigger remaining part of the budget, which is almost 90 percent, is available for the delivery of public services, programs, and projects, which comprises economic and social expenditures, personnel services and general public services,” she said.
Quoting the President in his budget message, the budget official said “the administration shall endeavor to attain its macroeconomic and fiscal objectives by working towards a strong domestic demand, coupled with a comprehensive but harmonized socioeconomic agenda, economic resilience, fiscal discipline, and investor confidence and continued favorable sovereign credit ratings.”
She maintained that debt incurred in recent years has been put into good use, such as on productive investments in infrastructure and human capital, as well as in recovery and health programs amid the pandemic.
“Debts incurred for the realization of projects are not plain and simple government expenses. They are investments that are made for the purpose of realizing a minimum required economic return,” she concluded.