MANILA - The Philippines’ rising debt and budget deficit levels remain manageable and sustainable, the Department of Finance said on Tuesday.
Finance Secretary Carlos Dominguez said the debt-to-GDP ratio is projected to reach 53.5 percent in 2020, up from the pre-pandemic goal of 40.2 percent and 2019’s historic low of 39.6 percent.
The 2020 debt-to-GDP ratio is “well within the prescribed bounds of fiscal viability,” Dominguez said.
This year, the debt-to-GDP ratio is expected to settle at 57 percent, which is still within a “sustainable threshold”, Dominguez said.
He added that this year, the government will maintain an elevated but manageable budget deficit of 8.9 percent.
“We will continue to exercise discipline and prudence in managing our fiscal affairs. This, I believe, is the key to a strong and sustainable recovery,” Dominguez added.
According to the Bureau of Treasury, the national government’s total debt hit P10.13 trillion at the end of November last year, while the budget deficit from January to November breached the P1-trillion mark.
Despite this, Fitch Ratings on Monday affirmed Philippines' long-term foreign-currency issuer default rating at 'BBB' with a stable outlook, citing modest government debt levels, "robust" external buffers and still-strong medium-term growth prospects.
Dominguez added that the government will continue borrowing from local sources to reduce forex risks
The Finance chief said the government is banking on reopening the economy this year, and on a slew of pump-priming measures.