The Philippines recorded a debt-to-GDP ratio of 60.9 percent for end-2022, which is lower than the 61.8 percent target that was set in the Medium-Term Fiscal Framework (MTFF).

“Our medium-term fiscal plan and exemplary GDP growth have allowed us to outpace our borrowings. This gives us confidence that we can reach our targets by 2025,” said Finance Secretary Benjamin Diokno.

Through the MTFF, the National Government (NG) aims to bring down the debt-to-GDP ratio to less than 60 percent by 2025 and further down to 51.1 percent by 2028; reduce the deficit-to-GDP ratio to 3.0 percent by 2028; and maintain high infrastructure spending at 5 to 6 percent of GDP annually.

For December 2022, the NG’s total outstanding debt also took a favorable decrease by 1.7 percent or PHP225.3 billion due to local currency appreciation and net redemption of domestic government securities.

The country’s debt management strategy prioritizes the domestic market over external sources to protect the country against foreign exchange risk. Fluctuations in exchange rates run the risk of increasing debt service payments each time the peso depreciates.

Out of the PHP13.4 trillion total outstanding debt as of end-2022, domestic debt accounted for PHP9.2 trillion or 68.6 percent of the total debt stock, while external debt made up the remaining PHP4.2 trillion or 31.4 percent of the total debt stock.

Total NG guaranteed obligations increased by PHP11.1 billion or 2.8 percent Month-over-Month (MoM) to PHP399.1 billion due to the net availment of domestic guarantees and the net effect of currency fluctuations, which increased the value of external guarantees.

Compared to the end-December 2021 level, the total NG guaranteed debt dropped by PHP24.9 billion or 5.9 percent.