General government debt to GDP slightly up

February 18, 2018

The country’s ratio of General Government debt to the Gross Domestic Product (GDP) stood att 36.4 percent as of end-June 2017, slightly up from the 35.3 percent recorded as of the same period in 2016, according to the Department of Finance (DOF) in a statement on Sunday.

In a report to Finance Secretary Carlos Dominguez III, the DOF Domestic Finance Group (DFG) said that as the National Government (NG) expenditures picked up in 2017 resulting in a higher deficit, "debt ratios reflected the increase in programmed borrowings. The National Government operations impact the most on the GG debt ratios."

NG debt (net of the Bond Sinking Fund, or BSF) reached P5.8 trillion, up by 10.3percent from P5.3 trillion from the level as of the end of June 2016.

Because the BSF can only invest in government securities, and these holdings are considered intra-sectoral and netted from total outstanding NG debt, the decline in BSF holdings, combined with peso depreciation, led to higher outstanding NG debt for the period, the DFG said.

It bared that LGU (local government unit) debt reached P85.8 billion, an increase of 9.2 percent compared to the P78.6 billion posted for the same period in 2016.

Government securities held by social security institutions declined by P59.7 billion far outweighing LGU loans held by the Municipal Development Fund Office (MDFO) which was up by P3.5 billion, it said.

Total GG debt was made up of 61 percent (P3.331 trillion) domestic borrowings while 41percent (P2.166 trillion) came from foreign creditors.

GG debt includes the outstanding debt of the NG), the Central Bank Board of Liquidators (CB-BOL), social security institutions (SSIs), and LGUs, minus intra-sector debt holdings of  government securities including those held by the BSF. DMS