An economist said the government’s debt is expected to remain sustainable in the next years as it is still below the international threshold of 60 percent of domestic output.
The Bureau of the Treasury (BTr) earlier reported that the total outstanding liabilities of the government amounted to P9.368 trillion as of end-September 2020, lower than month-ago’s P9.615 trillion after the government paid its P300 billion short-term borrowing from the Bangko Sentral ng Pilipinas (BSP).
Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said the country’s debt-to-GDP (gross domestic product) ratio remains low compared to countries with similar credit ratings.
He said this is among the factors why debt raters affirmed the Philippines’ credit ratings amid the pandemic.
Economic managers forecast debt to account for half of the country’s total output by 2022 due to higher requirements to address the pandemic and finance the recovery program.
Ricafort said this level is still acceptable, citing that the external debt-to-GDP ratio as of end-June this year is lower at 23.7 percent.