More Filipinos needed to pay for debt? Bato asks econ managers to assure debt manageable

Should Filipinos be bearing more children to lower the country's debt per capita?

This was the question Sen. Ronald "Bato" Dela Rosa posed as regards the idea that a higher population would make the debt more manageable.

He urged the administration's economic managers to assure that debt is under control amid the record-high level of the Philippines' indebtedness.

"Mayroong nagsasabi na mas maganda siguro kung mas manganak tayo ng maraming anak kasi para lumaki ang population natin at pag lumaki ang population, mas marami ang mahahati-hati sa utang, mas bababa ang per capita na utang natin,” he added.

(They're saying we're rather unfortunate. Our grandchildren have yet to be born but they already have debt. Some say we should have more children so our population will increase and the debt will be divided among more people. Our debt per capita would go down.)

As of the end of June, the country’s debt reached a new record high at P14.15 trillion.

Dela Rosa made the remark during the Senate Committee on Finance briefing on the 2024 National Expenditure Program with the Development Budget Coordination Committee (DBCC).

“’Yung simpleng pinobre na pag-iisip, ang anak nila mas marami para yung per capita debt natin baba, the bigger the population mas maraming maghahati hati sa utang,” Dela Rosa said.

(It's the rather simple mentality. The more children they have , the lower debt will be per capita. With a bigger population, more will pay the debt.)

He asked the economic managers if the Filipinos should panic amid the reported increasing debt.

Finance Secretary Benjamin Diokno maintained that the current debt situation of the country is not worrisome and it is still manageable as the borrowing arrangement that the Philippines entered into has fixed interest rates which means the interest will not increase regardless of the status of the economy.

“'Yun pong utang, as we mentioned, hindi naman nakakatakot," Diokno said.

(The debt, as we mentioned, is not that scary.)

Diokno said 60 percent of the country's gross domestic product is "reasonable."

He also pointed out that the borrowings had fixed interest rates instead of floating.

The chief economic manager also explained that the proposed 2024 national budget, which will be partially funded by borrowings, is focused on investment in infrastructure which, he said, would benefit the poor Filipinos.

“If you notice the composition of the budget, it's mostly investment. We are committed to investing at least three to six percent of our GDP for infrastructure,” Diokno said.

“Napakalaking bagay po nu’n kasi patuloy pong lalago ang ekonomiya natin. So makikinabang naman po d’yan lalo ang mahihirap and if you look at the composition of the budget is talagang pro-poor po yan,” he added.

(That's significant because our economy will grow. The poor will benefit from that and if you look at the composition of the budget, it's pro-poor.)

For Diokno, the proposed budget for next year should be evaluated by the tax an individual pays compared to the benefits they receive from the government.

“Kung ikaw ay mahirap, hindi po naman napakalaki ang binabayad niyong buwis e, but you get a lot of benefits. Free education, free health care, social protection measures. In fact, hanggang ngayon nga free na rin ang college e di ho ba?” he said.

“So that’s the way you should look at the budget… Palagay ko ‘pag tininginan nyong ganon, makikinabang po ang maraming mahihirap,” he added.

(If you're poor, you don't pay a huge tax but you get a lot of benefits. Free education, free health care, and social protection measures.even college is free, isn't it?)

Senate deputy minority leader Risa Hontiveros refuted Diokno, saying many poor Filipinos should still worry about the country’s debt.However, Senate Deputy Minority Leader Risa Hontiveros refuted Diokno, saying many poor Filipinos should still worry about the country’s debt.

“Madali po sigurong sabihin ‘wag tayong mag-aalala sa utang pero tulad ni Sen. Koko [Pimentel], nag-aalala po ako and sa totoo lang ‘di po tayo dapat mag-overpromise kung nag-a-underdeliver pa,” Hontiveros said.

(It's easy to say that we should not be concerned over debt but like Sen. Koko Pimentel, I'm worried and to be honest, we should not be promising too much when we've yet to deliver enough.)

“I think, kung pakikinggan po natin yung iba't ibang sectors, nasa krisis po sila at… Hindi po sila nakikinabang talaga sa kumpletong libreng health care. ‘Yung mga problema sa proteksyon, damang-dama pa rin nila. Hindi pa rin nila naranasan na magmura na ang pagkain... In terms of social protection, yun na nga, hindi pa nila pakiramdam na protektado sila,” she went on.

(I think if we would listen to the different sectors, they are still in crisis... They have yet to benefit from free and complete health care. They still feel the problems as regards protection. They have yet to see the cost of food go down... In terms of social protection, they have yet to feel that they are protected.)

The government has earmarked 12.1% or P699.2 billion of the proposed P5.768 trillion national budget next year to finance payment of obligations or debt burden.

As of the first quarter of 2023, the country’s debt-to-GDP ratio was recorded at 61%, down from the 63.5% ratio in the first quarter of 2022.

The debt-to-GDP ratio represents the amount of the government’s debt stock relative to the size of the economy. —NB, GMA Integrated News