DOF Sec Says PH Economy, and Not Just Debt, Is Also Important

Department of Finance (DOF) Secretary Benjamin Diokno has stated that the Philippines’ public debt albeit higher, stays at a manageable level beside macro fundamentals and forecasts robust growth in the near term. 

Secretary Diokno has cited a recent report that listed countries that had the highest risk of default and the Philippines was notable not part of the list. According to the report, several countries had GDP or public debt-to-gross domestic product levels higher than the ratio of the Philippines.

As of the report, by the end of the first quarter of this year, the ratio of the Philippines was recorded at 63.5%.

Sec Diokno says that “The debt-to-GDP ratio is not the sole criterion that matters. The economic fundamentals of the country should be considered,”

“The demographic profile of the country matters — young or aging? Resiliency matters — how did it perform in previous crises? Is the economy dependent on many or limited sources? What’s the quality of political institutions — democratic or authoritarian?” Diokno

Sec Diokno also adds that the macro fundamentals of the country were doing well and says that “The fiscal and monetary authorities are in control. The debt-to-GDP ratio is manageable,”

“The banking system is sound and more than adequately capitalized; the non-performing loan (NPL) ratio, which is low, continues to fall. The banking industry has built in enough buffers,”  mentions Sec Diokno.

“Our external sector remains robust: gross international reserves (GIR) are more than enough and there is a steady structural inflow of foreign exchange: overseas Filipinos’ remittances, business process outsourcing (BPO) receipts, and rising exports,”  according to him.

Source: Inquirer