The Philippines might go above its P14.6 trillion debt assumption by the end of this amid growing economy, a high ranking state treasury bureau official recently said.
National treasurer Rosalia de Leon said this in a weekly briefing as the country’s outstanding debt had breached the P14-trillion mark as of end-May.
However, de Leon emphasized that the outstanding debt as a share to the overall economy remains healthy.
“We are not really thinking of it in terms of the nominal because we have repayments. And we look at debt-to-GDP and how we are using the debt to grow the economy,” De Leon said.
For context, debt as a share of gross domestic product as of the first quarter of this year reached at 61 percent, better than 63.5 percent in the same period last year.
However, the latest debt-to-GDP data is slightly above the end-2022 debt-to-GDP ratio of 60.9 percent.
“This year, we might end up at around 61 percent. We are confident with our six to seven percent (GDP) growth (for the year),” De Leon said.
Finance Secretary Benjamin Diokno emphasized that the Philippines’ debt situation remains under control.
He pointed out that credit rating agencies like Fitch and Moody’s also share this sentiment, as they are not concerned about the country’s level of debt.
“It depends on where you put it. It’s not bad to borrow money for as long as you use it properly,” Diokno said.
“We are using the money for infrastructure and the meaning of that is we are expanding the capacity of the economy,” he said.
De Leon, meanwhile, said that stated that credit rating agencies are not particularly worried about the country’s ability to repay its debt. This is due to the fact that the debt profile remains strong in terms of foreign exchange composition and maturity of the obligations.