The Philippine economy is expected to grow faster than government debt over the next four years, Finance Secretary Ralph Recto said Wednesday.
Recto said while government debt could reach P20 trillion by 2028, it would be less than 60 percent of the country’s gross domestic product which is estimated to hit P37 trillion in the same period.
“By 2028, the debt of the Philippines would be roughly P20 trillion. Our economy by 2028 is expected to be about P37 trillion,” Recto said at the Kapihan sa Manila Bay news forum.
“This means that the income of ordinary Filipinos would be higher. We would have a bigger economy and more jobs,” said Recto.
He said the Philippines is on track to achieving upper middle income (UMIC) status by 2025.
“We recently achieved an all-time high gross national income per capita. This bodes well for our goal of reaching an upper middle-income country by 2025. This means we can expect higher income of each Filipino,” he said.
“The most important thing is we lifted about 2.5 million Filipinos from poverty in 2023. This is why our poverty incidence fell to 15.5 percent,” he said.
Recto said of the government debt, around 70 percent would be sourced domestically, suggesting that Filipinos themselves would be the primary creditors.
Data from the Bureau of Treasury (BTr) show that the national government debt climbed to P15.48 trillion as of end-June 2024, a 0.9 percent increase from the end-May level primarily due to new borrowings and the peso’s depreciation against the US dollar.
It said of the total debt stock, 31.71 percent was external debt, while 68.29 percent represented domestic debt.
The government targets to bring down the debt-to-gross domestic product (GDP) ratio to 57 percent by 2028. In 2023, the debt to GDP ratio eased to 60.1 percent from 60.9 percent in 2022.
“We are determined to continue pushing it below 60 percent so we have enough buffer in case another crisis hits us,” Recto said.
“And we are using debts to spur our strong economic recovery by investing heavily in more infrastructure and human capital development projects which have the highest multiplier effect on the economy,” Recto said.
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