General Government Debt down to 38.9% of GDP

As of March 2013, the Philippines’ Consolidated Public Sector Debt was recorded at P7.7 trillion, equivalent to 71.3% of GDP. The ratio decreased from 74.3% of GDP as of March 2012.

Consolidated Public Sector Debt represents the total debt of the National Government, Local Government Units, the 14 Monitored Government Corporations (MNFGCs), the country’s Social Security Institutions, the Bangko Sentral ng Pilipinas (BSP), and the three Government Financial Institutions (GFIs), net of the government’s holdings of its own debt through the above-mentioned institutions and the Bond Sinking Fund (BSF).

The P7.7 trillion debt represents an increase of 2.0% equivalent to P154.2 billion from the end-2012 debt of P7.5 trillion. Total domestic debt of the public sector increased by 5.3% to P5.5 trillion while foreign debt decreased by 5.4% to P2.1 trillion.

Non-financial public sector debt was down by 2.7% to P5.4 trillion, equivalent to 50.4% of GDP. This was attributed to the P155.6 billion decrease in NG debt, lower debt of LGUs, and also the decrease in both the domestic and foreign liabilities of the 14 MNFGCs.

The outstanding debt of the financial public corporations grew by 5.4% to a level of P3.9 trillion. BSP debt registered an increase of 6.7% offset by a decline of 21.3% in the debt of the GFIs from December 2012 level.

General Government (GG) debt, which counts National Government Debt net of the government’s holdings of its own debt, is down 3.1% from the December 2012 level. The ratio of General Government debt to GDP declined to 38.5% from 40.6% as of the end of 2012, which DOF Undersecretary and Chief Economist Gil Beltran lauded as the result of an intelligent borrowing program.

“The benefits of our liability management program have allowed us to notch General Government Debt at only 38.9% of GDP. We already scored more favorably on this metric than many other economies rated higher than us and we were able to drive this down further,” Beltran said.

“In fact, our General Government ratio is now lower than the ASEAN+3 average of 39.4%.”

The Philippines in 2013 received upgrades to “Investment Grade” status from the three major credit rating agencies – Fitch Ratings, Standard and Poors’, and most recently by Moody’s Investors Service.

As of March 2013, 28.0% of total outstanding public sector debt is owed to foreign creditors and the remaining 72.0% is owed to domestic creditors.

OPSD Q1 for release – PDF