THE Philippines’ outstanding debt as a share of its overall economy climbed to 61.3 percent as of the third quarter of 2024, above the government’s target and global benchmark as economic growth slowed during the period.
Latest data from the Bureau of the Treasury (BTr) showed the latest debt-to-GDP, or the country’s debt compared against its gross domestic product, is higher than the 60.9 percent debt-to-GDP recorded in the second quarter of 2024 and the 60.2 percent a year ago.
This is also above the government’s full-year debt-to-GDP target of 60.6 percent, as set by the Cabinet-level Development Budget Coordination Committee (DBCC), and the international accepted threshold of 60 percent.
The ratio is used to evaluate the country’s economic stability and debt repayment ability. A lower ratio indicates the country has a more sustainable debt level, which can affect its ability to source financing, attract foreign investments and pay off its obligations.
“The debt ratio reflects the accomplishment of 89.5 percent of the full-year borrowing program to fund 2024 expenditures,” the Treasury said.
The latest debt-to-GDP data comes after the Philippines’ economy slowed to 5.2 percent in the third quarter of the year, the slowest since the second quarter of 2023 at 6.4 percent and slower than the 6 percent recorded year-on-year.
Rizal Commercial Banking Corporation (RCBC) Chief Economist Michael L. Ricafort said the tax and other fiscal reform measures will help increase the government’s revenue collections, thereby reducing the debt-to-GDP ratio.
Continued economic growth would also help the country’s fiscal management and debt management be sustainable over the long term and for the coming generations, in terms of maintaining the country’s favorable credit rating, Ricafort added.
Finance Secretary Ralph G. Recto said earlier that the Philippines is on track to outgrow its debt despite the increasing debt level amid expectations of faster economic growth.
“We are using debts to spur our stronger economic recovery by investing in more infrastructure and human capital development projects, which have the highest multiplier effect on the economy,” the Finance chief said.
The government’s outstanding debt reached a new record high at P15.893 trillion as of the third quarter of 2024, 11.4 percent higher year-on-year from P14.268 trillion. This is projected to reach P16.056 trillion at the end of the year.
