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Debt ratio seen slide further in 2015

To 45.6% of GDP

The national government’s outstanding debt as a proportion of the country’s whole economy is expected to slide further next year as the Aquino administration continues its liability management program.

Based on the data presented to Congress by the Department of Budget and Management, the government outstanding debt as a percentage of the economy, as measured by gross domestic product (GDP), would decline to 45.6 percent next year from 46.2 percent this year.

National Treasurer Rosalia B. de Leon said the improvements in debt ratio reflects the government’s improved fiscal space due to the Aquino administration’s proactive liability management program and corporate governance reforms.

De Leon added that the healthy debt-to-GDP trend was a major component in the investment grade rating the government secured last year from the three major international credit rating agencies.

The debt-to-GDP ratio, one of the key indicators closely watched by major international credit rating agencies, is a measure of the government’s capacity to settle its obligations.

The drop in debt-to-GDP ratio is in line with Aquino administration’s goal of reducing it to below 45 percent by 2016, which will be driven by the government’s effort to boost further its tax collections through efficiency as well as proactive debt liability management agenda.

Since the Aquino administration took office in 2010, the government debt-to-GDP ratio has been in a declining trajectory from a high of 54.8 percent in 2009.

As of May this year, the outstanding debt of the national government reached P5.632 trillion, translating to roughly P56,320 debt for every Filipino based on a 100 million population.