Philippines National Debt Soars to 14 Trillion Pesos
By the end of May, the Philippines national debt soared past the P14 trillion mark, reaching a record high. The Bureau of the Treasury’s latest data revealed that the debt rose by 1.33 percent from the previous month to reach P14.1 trillion. On a yearly basis, the amount increased by 13 percent from P12.5 trillion.
In May alone, the government accumulated fresh obligations amounting to P185.4 billion through the issuance of both domestic and external debt. The current debt accumulated by the Marcos administration stands at P1.295 trillion in just 11 months. This makes up around 96.35 percent of the projected P14.63 trillion debt by the end of 2023.
Debt not necessarily bad
Finance chief Benjamin Diokno defended the current debt level. He emphasized that borrowing money itself is not necessarily bad but rather the allocation of those funds. Next year, the government will persist in increasing its borrowing. It targets P2.46 trillion, with a mix of 80 percent domestic and 20 percent external funding.
According to Rizal Commercial Banking Corp. chief economist Michael Ricafort, the timing is favorable for the government to borrow more, considering the downward trend in inflation and the potential reduction of interest rates and borrowing costs if the Federal Reserve starts cutting rates in 2024.
Treasury data revealed that 70 percent of the debt comprises domestic borrowings, while the remaining 30 percent is sourced externally. Total domestic debt reached P9.59 trillion, rising by 1.38 percent on a monthly basis and 10 percent from May 2022’s P8.67 trillion. External obligations increased by 1.22 percent to reach P4.51 trillion.
Additionally, the total debt guaranteed obligations slightly increased to P384.52 billion.
Ferdinand Marcos Jr, son of the former dictator, became the Philippine president, promising unity, jobs, infrastructure, and lower food prices. A strong social media campaign helped him win. After his election win, he told the public: “Judge me not by my ancestors, but by my actions.” In conclusion, most are jittery as this massive debt reminds them of the obligations left by his father, Marcos Sr.
