MANILA, Philippines - Each Filipino now owes P47,039 to local and foreign creditors, based on the national government's total debt stock as of September.
A month before that, each of the 92.2 million Filipinos owed P45,889.
The culprit: the widening budget deficit that prompts the government to borrow some more. Additional debts, which address current funding needs but could be paid in the future, translate to more debt burden for future generations.
The fact that the Philippines has been spending more than it earns is not earthshaking. Even the richest of countries have budget gaps. But prudence dictates that this deficit, which is a fiscal policy issue, has to be manageable.
Already, there are concerns about how the Philippines is faring as far as fiscal discipline is concerned.
The Philippines blew past its P250-billion fiscal gap target for 2009, recording a deficit of P272.5 billion with one more month to go before the year ends.
If this year's experience is any guide, analysts believe the country's 2010 budget deficit will also breach the government's official target.
Weak revenues—due to slower economic growth, several revenue-eroding laws, the negative impact of typhoons on tax collection, and lackluster privatization of assets—have been blamed for the wider-than-targeted deficit this year.
Except for privatization, which is expected to pick up steam, the same factors are seen to push the budget deficit above goal in 2010.
Despite the continued deterioration in the government's fiscal position, analysts at some of the biggest banking institutions say it's not as bad as it seems.
The government had set next year's budget deficit ceiling at P233.4 billion, but the country's economic managers are looking to increase this "to incorporate realistic assumptions."
They said more revenue-eroding measures that will take effect next year as well as the lingering economic downturn will take toll on the collections of the government's main tax agencies, the Bureau of Internal Revenue and Bureau of Customs.
The government is also expected to spend more for reconstruction efforts following back-to-back typhoons.
Taking these into account, Finance Secretary Margarito Teves said the actual 2010 deficit figure may hit close to P300 billion, the same as their "worst-case scenario" for the 2009 budget gap.
Teves' forecast is in line with analysts' consensus.
Viewed in the context of the current economic crisis, financial experts say the country's swelling budget shortfall is not worrisome at all.
Unlike in 2004, when the poor fiscal state of the country was a product of the government's own hubris, the recent global crisis has made a large deficit more acceptable.
According to Metrobank head of research Marc Bautista, the country needs to incur a deficit to be able to sustain economic growth by curing sluggish demand through increased spending.
He noted that other countries are doing the same thing.
"There is room for deficit spending in 2010, the markets all but expect it already, and the Philippines is not alone in this predicament," Bautista said.
DBS strategist Philip Wee, for his part, said the widening budget gap has not really affected the strength of the Philippines , given the country's steadily rising external liquidity, and the peso's stability.
Nonetheless, the Philippines is eyeing to wipe out its budget deficit by 2013.
The country first targeted to balance the budget in 2008, but pushed this goal back to 2010 due to adverse external developments, including the rise in commodity prices and the onset of the global financial crisis. The 2010 goal was pushed further to 2013 to accommodate deficit spending for the economy.
As the country consolidates its fiscal position, Teves said that the government’s debt as a percentage of gross domestic product will also drop to 46.1% by 2013 from the programmed 57.6% by end-2009.
Similarly, he said the consolidated public sector fiscal position—the combined fiscal positions of the government, state-owned agencies and government financial institutions—will post a surplus during that year.
In the end, the economic managers will be assessed on how they managed the country’s finances. After all, it is the future generations of Filipinos who will bear the burden of today’s folly. - Text and graphics by Judith Balea, abs-cbnNEWS.com; with reports from Business Mirror, The Philippine Star