The government is expecting to increase the country's debt-to-gross domestic product (GDP) ratio to 58 percent this year on account of more borrowings to finance the higher budget deficit.

The Department of Finance (DoF) has projected that debt for 2010 would reach P4.83 trillion, higher than previous forecast of P4.723 trillion.

Aimed at improving the country's credit worthiness and ability to attract investors, the government had been trying to reduce the proportion of its outstanding debt-to-GDP for several years.

Debt-to-GDP ratio that is considered manageable based on international standards, DoF said is at 50 percent.

This ratio is also one of the indicators used by credit-rating agencies in assessing a country's credit standing, indicating the manageability of a country's debts.

The government programmed the budget shortfall for the year at P293 billion due to continuous stimulus spending.

The government is also looking at P30 billion in revenues from the privatization of assets this year.

As of November last year, government debt rose by 4.4 percent as the state turned up its borrowings to make up for weak tax collections.

The government debt increased by P188.2 billion year-on-year to P4.424 trillion in November. The end-November figure was also 0.8 percent higher than the previous month.

Over half of the total outstanding amount, or P2.452 trillion, was owed to domestic creditors, while the balance of P1.972 trillion was due foreign lenders.

The domestic component of the government debt inched up 2 percent from a year ago, and the foreign component rose by a faster 7.6 percent, as the Arroyo administration returned to the global bond market three times last year.

Foreign currency-denominated government IOUs grew nearly 7.7 percent in the first 11 months of 2009, with dollar-denominated debt papers comprising the bulk at P1.007 trillion.