DOF Sec Diokno Says That PH Will Not Follow Sri Lanka

According to the current administration’s chief economic manager, the Philippines is not expected to follow Sri Lanka’s route on defaulting debts despite taking out loans to secure vaccines, boosters, and funding programs related to the pandemic.

Finance officers told the Senate that the national government’s outstanding debt was manageable as it comprised of long-term obligations and that the country’s investment-grade credit ratings will not be affected by the high national debt.

“I can assure you that we will not go the Sri Lanka way,” says Department of Secretary (DOF) Benjamin Diokno. He also says that previous DOF Secretary Carlos Dominguez was “very good at making sure that we borrow at the lowest possible rate.”

The share of the country’s public debt to the economy went down to 62.1% by the end of the first six months of the year since the government borrowed less money. The debt-to-gross domestic product (GDP) ratio by the end of June went below 63.5% in Q1.

The outstanding debt of the national government was at a record high of ₱11.7 trillion last year. In the first half of this year, the debt of the national government was almost split to ₱1.07 trillion in light of economic recovery producing more non-tax and tax revenues.

The current Marcos administration is proposing to slowly lower the public debt ratio to 52.5% by the year 2028. In pre-pandemic times, the country’s debt-to-GDP hit a record-low 39.6% back in 2019 but due to the vaccines and financial assistance to vulnerable groups during the pandemic only inflated the debt.

Source: Inquirer