MANILA — The Philippines could face a P15.8 trillion national debt by the end of 2024, an official said on Tuesday.

“For 2024 po, ang aming projection of NG (national government) outstanding debt, would be P15.8 trillion,” National Treasurer Rosalia de Leon told the Senate finance committee as it tackled the administration's budget proposal for next year.

Senate Minority Leader Aquilino "Koko" Pimentel III then asked, "How come Filipinos should not worry about their ballooning debt?"

De Leon said the Philippines' debt was at par with that of other countries.

The Philippine debt to GDP ratio was at 61 percent, compared to Malaysia’s 61.67 percent, Thailand’s 61.57 percent, and Singapore's 167.7 percent, she said.

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De Leon added that around 70 percent of the Philippine debt was peso denominated, which meant less volatility in terms of headwinds that could affect debt service.

“Our credit agencies, in fact the Fitch po, they even upgraded our credit rating in the Philippines from negative to stable,” she said.

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The Philippines' outstanding debt stood at P14.15 trillion in June.

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From next year's proposed P5.768-trillion budget, the Philippines will have to source P1.2 trillion for principal payments and an interest of P670 billion, for a total of P1.911 trillion, De Leon said.

This year, the government is paying a loan interest of P582.3 billion for its P14 trillion loans, she said.

The country's loans cannot be immediately reduced because government coffers are still in a “deficit,” De Leon said.

“Meaning to say, we have to continue to borrow to finance our budget,” she said.

The Philippines faces a budget deficit of P1.5 trillion this year and P1.356 trillion next year.

LIKE FAMILY BUDGET

National Economic and Development Authority (NEDA) Secretary Balisacan likened the country’s budgeting process to a household where parents would tend to get loans or consider external options have enough money and improve their standard of living.

“A country like us has so many development needs... We have to access external or internal resources if we want to grow fast. We can grow at the end without borrowing, but we will be content with one percent, two percent, three percent growth. Is that the growth we want,” he said.

“The only problem is if you borrow and if you use it wastefully, then, you’ll be in trouble. And I think, that’s the problem in the past. But I think this time naman we’re trying to put in place a government structure that allows us to grow with the debt,” he added.

Finance Secretary Benjamin Diokno also justified next year's projected debt by citing the need to invest in infrastructure to spur economic growth.

“They (ASEAN neighbors) have been investing, mga 10 percent of their GDP... We need to invest on the economy,” he said.

Sen. Sonny Angara, chairman of the Senate Finance Committee, said the government in 2004 spent about 30 percent of its national budget on debt payment interests, against the current 11 percent share.

“For me, that’s a sign. Even if we’re borrowing in absolute terms at a higher level, relative to the budget, we’re able to use that borrowing in a productive manner because it is plowed back into spending rather than just servicing debt,” Angara said.

SHOULD WE FEAR DEBT?

In the same hearing, Sen. Ronald Dela Rosa raised the concern of ordinary Filipinos, especially the underprivileged, regarding the country’s ballooning debt.

Diokno replied that indigent Filipinos were benefitting from the country's "long term" loans with fixed interest rates.

“If you notice the composition of the budget, it’s mostly investment. We are committed to invest to at least 5 to 6 percent of our GDP for infrastructure. Napakalaking bagay po no'n, kasi patuloy pong lalago ang ekonomiya natin, so ang makikinabang po dyan lalo ay 'yung mga mahihirap,” Diokno said.

(If our economy continues to grow, that will benefit the poor.)

The finance chief described the budget as "pro-poor" and said Filipinos should look at the budget against how much tax one is paying.

“Kung ikaw [ay] mahirap, hindi naman po 'yung binabayad niyo na napakalaking buwis eh. But you get a lot of benefits: free education, free health care, social protection measures,” Diokno said.

“That’s the way you should look at the budget. Magkano ang binabayad kong buwis, at magkano ang benefit ko dito sa budget na ito? Palagay ko, pag tiningnan ang ganun, makikinabang po ang maraming mahihirap,” Diokno added.

(If you are poor, you are not paying a lot of taxes... That’s the way you should look at the budget. How much am I paying and how much benefit am I getting from this budget? If you look at it that way, it benefits many poor Filipinos.)

Dela Rosa quipped, “So, don’t panic mga Pilipino. Utang lang yan.”

(It's just debt.)

“And have babies, Senator dela Rosa. Have babies. Para manatili ang utang,” Angara said in jest.

But for Sen. Risa Hontiveros, one take the budget as a laughing matter, given the seriousness of the debt issue.

“Madali po sigurong sabihing 'wag tayong mag-aalala sa utang, pero tulad ni Sen. Koko, nag-aalala po ako and sa totoo lang, 'di po tayo dapat mag-overpromise kung nag-a-underdeliver pa kasi pakiramdam po ng karamihan na I think kung pakikinggan po natin 'yung iba't ibang sectors, nasa krisis po sila,” Hontiveros said.

(It's easy to say don't worry about the debt, but like Sen. Koko, I am worried. Let's not overpromise if we underdeliver because most people, if we listen to various sectors, would say that they are in crisis.)

“Sila (mahihirap) hindi po sila nakikinabang talaga sa kumpletong libreng healthcare... Hindi pa rin nila naranasan na magmura na ang pagkain, ni pamasahe, ni 'yung kita ng mga jeepney drivers natin. In terms of social protection, 'yun na nga, hindi pa nila pakiramdam na protektado sila,” she added.

(The poor do not feel that they benefit from completely free healthcare. They don't experience lower food prices or fares. They do not feel that they are protected.)

The Senate Finance Committee will resume its budget discussion on Wednesday.

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