DOF: 2023 National Budget Has Less Debt Burden

The Department of Finance (DOF) has mentioned that the expenditures for debt burden account for an estimated tenth of the proposed 2023 national budget of the Marcos administration.

DOF Secretary Benjamin E. Diokno has noted that it was faulty to cite the debt burden as one-third of next year’s national budget.

Sec Diokno has released a statement to bring light to the false media report that claimed around a third of the intended 2023 budget of the current administration will be used to pay off the debts of the government.

“Only 11.6 percent or P611 billion of the P5.268 trillion proposed 2023 National Budget is allocated for debt burden. The amount includes P582.3 billion for Interest Payments and P28.7 billion for Net Lending,” says Sec Diokno.

He also noted that it was “erroneous” to indicate the principal amortization of ₱1.02 trillion of the 2023 proposed national budget as part of expenditures.

Sec Diokno described principal amortization of debt as not being included as an expense item under any accounting standard either in the public or private sector, being only the settlement of debt obligations incurred from expenses already recorded previously.

He also says that principal amortization of a debt is not counted as additional debt because debt obligation is only transferred from an old creditor to a new creditor in the process of refinancing.

Sec Diokno has said that the proposed measure of the debt burden component of the budget comprises only interest payments and net lending as reflected in the Department of Budget and Management’s (DBM) People’s Budget primer.

Source: Manila Bulletin