Cause for concern as PH debt doubles under Duterte, says think tank

Rowegie Abanto, ABS-CBN News

Posted at Jun 03 2022 01:16 PM

MANILA — The Philippines' national debt under the Duterte administration has doubled, IBON Foundation pointed out Friday, saying it was a cause for concern.

The Department of Budget and Management (DBM) had said that there was no reason to fear debt that was incurred with "clear purpose."

"'Yung utang something to be alarmed about sa laki niya," IBON's executive director Sonny Africa told ABS-CBN's TeleRadyo.

(The debt is something to be alarmed about because of its large amount.)

The fact that the administration is mulling new forms of taxes to pay the skyrocketing debt means it's already alarming, Africa said.

He said that in absolute terms, the country's debt doubled from P6 trillion — which outgoing President Rodrigo Duterte's government inherited from the administration of former President Benigno "Noynoy" Aquino — to over P12 trillion, adding that Duterte's 6-year term was not yet finished.

The Bureau of Treasury said that the national government's total outstanding debt reached P12.76 trillion as of the end of April 2022 from P12.68 trillion the previous month. 

The country's debt was at P5.95 trillion at the end of June 2016.

Africa also sought to dispel the notion that the government heavily borrowed due to the COVID-19 pandemic, saying that according to the DBM, only P616 billion pesos was spent on the COVID response, and the remaining loans were allocated for the infrastructure program and debt payments. 

"Ayon mismo sa datos ng Bureau of Treasury, kung umutang tayo ng 5.5 trillion pesos nitong nakaraang dalawang taon, ayon naman sa DBM P616 billlion pesos lamang ang ginastos for COVID response habang P2.3 trillion pesos ang ginastos para sa pambayad utang at P1.9 trillion para sa imprastraktura," he said.

(According to Bureau of Treasury data, if we borrowed P5.5 trillion in the last 2 years, the DBM said only P616 billion was spent on COVID response, while P2.3 trillion was spent to pay our debts and P1.9 trillion for infrastructure.)

Bangko Sentral ng Pilipinas Governor Benjamin Diokno, President-elect Ferdinand "Bongbong" Marcos Jr.'s pick to lead the Finance department, had told ANC that the next administration would inherit a "much better economy" but with an increased debt-to-GDP ratio due to the COVID-19 pandemic.

He said the debt level was still manageable as long as the next administration ensures steady economic growth.

Africa, for his part, said he wasn't that optimistic that the nation's economy would grow 7 percent by yearend, indicating that while the infrastructure spending even before the pandemic increased, it did not help the country's GDP growth.

"So medyo di kami optimistic na kung before the pandemic hindi umubra 'yung infrastructure spending para mas pasiglahin 'yung ekonomiya ay ano pa kaya ngayon? Tingin namin sunshine para maganda naman ang weekend nila pero malabo po iyon," he said.

(We're not optimistic [about economic growth] because infrastructure spending even before the pandemic did not push the economy, what more now? That's unlikely to happen.)