Debts grew faster than the economy in the first three quarters of 2019, pushing a debt-to-GDP ratio of 43.3 percent as of September.
Computations made by Finance Underescretary Gil S. Beltran showed that the share of total national debt to gross domestic product was higher this year than 42.2 percent in 2018 and 41.7 percent in 2017.
Philippine debt as of end-September jumped 10.4 percent to P7.9 trillion from P7.1 trillion in 2018.
GDP growth averaged a slower 5.8 percent from January to September although the 6.2 percent growth in the third quarter, better than expected, had lifted disappointing growth rate in the first half mainly due to Congress’ failure to pass the P3.7-trillion 2019 national budget on time, a delay caused by legislators bickering over how much they can pocket from pork funds.
As a result, the government was forced to rely on a reenacted 2018 budget and underspend.
Underspending of P1 billion a day between January and April—before President Rodrigo Duterte signed the 2019 nationl budget—also pulled down the expenditures-to-GDP ratio to 19.7 percent from 20 percent during the first three quarters of 2018.
The latest Bureau of the Treasury data showed that between January and September 2019, total expenditures grew 5.51 percent to P2.627 trillion from P2.489 trillion during the same nine-month period in 2018.
Actual disbursements, however, was a little more than 2 percent lower than what had been programmed from January to September.
On the upside, improved administration and higher tax rates through the Tax Reform for Acceleration and Inclusion (TRAIN) Act, in effect since 2018, continued to improve revenue and tax ratios—17.5 percent in revenue and 15.7 percent in taxes. In 2018, it was just 16.9 percent revenue and 15.2 percent taxes.
The sum of tax and non-tax revenue was P2.3 trillion in 2019, up 10.25 percent from figures in 2018.
“Fiscal policy will continue to be a pillar for high, sustainable, and inclusive growth,” said Beltran.
“With ample resources to mobilize, agencies should nevertheless continue working with Congress for the timely passage of the [P4.1-trillion] 2020 budget,” Beltran added.
Last month, the head of the Duterte administration’s economic team said the share of debt to the growing economy was expected to further decline despite increasing borrowings to fund infrastructure and social protection projects.
“Even as we have scaled up our economic investments, we continue to manage our obligations with great prudence,” according to Finance Secretary Carlos Dominguez IIII at the Philippine Economic Briefing Roundtable in Washington D.C./TSB
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