Philippine debt burden growing faster than budget: House think tank


Posted at Sep 12 2023 02:12 PM

MANILA — The Philippines' debt burden is growing faster than overall budget increase, and over half of the 2024 budget can no longer be allocated to productive expenses, a congressional think tank said. 

While the national government's expenditure program has been steadily going up, the rate of its increase is much slower than the growth of the debt burden since 2021, the Congressional Policy and Budget Research Department (CPBRD) said. 

This year's P5.268 trillion budget grew by only 1.8 percent from 2022, while the debt burden grew higher at 15.3 percent, it noted. 

Next year's proposed expenditure program of P5.767 trillion is going to grow at a faster pace of 9.5 percent. But it will be still below the 14.4 percent growth in debt burden, the CPBRD said. 

For four consecutive years, the portion of the national budget that goes to the debt burden has consistently grown to 12.1 percent in 2024 from 9.3 percent in 2020, the think tank said. 

The annual budget share of debt service-interest payments increased to 11.6 percent in 2024 from 9.7 percent in 2022. 

The CPBRD said interest payments next year could amount to P670.5 billion. It is the third biggest contributor to budget growth at 1.7 percentage points, even higher than that of economic services.

The think tank said this would leave little room for government to spend on productive endeavors. 

It noted that on average, 57.4 percent of the national budget is already set aside for mandatory expenditures such as personal services (PS) and the automatically appropriated items.

This means that the review and reallocations by Congress practically cover only the remaining 42.6 percent of the proposed expenditure program. 

Next year, mandatory expenditures will account for a higher share of 58.5 percent, primarily due to the increase in the shares of PS and interest payments. 

Personal services, including retirement and life insurance premiums, accounts for 29.4 percent of the expenditure program, while interest payments cornered 11.6 percent. 

Philippine debt hit a record of P14.24 trillion in July.


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