The Philippine government continues to improve on its liability management performance on the back of the Aquino administration’s commitment to uphold the nation’s creditworthiness. As of March 2014, the general government (GG) debt stood at P4,492.0 billion or 38.1% of GDP. The current ratio is lower than the Q1 2013 level of 38.5%.

GG debt, which nets out intra-holdings of government securities including those held by the Bond Sinking Fund (BSF), went down amidst strong GDP performance and slower debt accumulation for Q2-Q4 2013, as part of the government’s priorities on proactive liability management. The combined investment in government securities of the GSIS and the SSS, meanwhile, rose from P474.6 billion to P481.0 billion between 2013 and Q1 2014.

Treasurer of the Philippines Rosalia de Leon said, “We will continue to bring down government debt as part of our efforts to minimize government risk and liabilities. As our economy continues to grow, we want to ensure that we do so on sound and strong fiscal foundations.”

The foreign component of the consolidated GG debt also decreased from 43.39% to 42.06% during the same period behind government efforts to reduce exposure to foreign currency risk. As a result, the domestic component rose slightly, from 56.61% to 57.94% during the same period.

General government debt includes outstanding debt of the NG, the CB-BOL, SSIs, and LGUs, less intra-sector holdings of government securities including those held by the BSF. The ratio is used by many debt watchers to assess the creditworthiness of sovereigns.

The general government debt to GDP ratio was at 44.3% in 2009, prior to the Aquino administration. This marks an improvement of 6.2 percentage points (ppt) over the course of the administration.