PHL debt-to-GDP ratio dips in 2013

The ratio of Philippine government debt to economic output inched lower as of end-2013 due to a fiscal consolidation program, the Department of Finance (DOF) reported Friday.

In a statement, the DOF said government debt stood at P4.529 trillion or 39.2 percent of the country's gross domestic product (GDP).

The debt-to-GDP ratio is lower than the 40.6 percent in the same period in 2012 and improved from 44.3 percent posted in 2009.

The DoF said the decline can be attributed to ongoing fiscal consolidation, as the deficit-to-GDP ratio is only 1.3 percent while GDP growth is 7.2 percent.

"This continuing trend of decreasing [general government]-debt-to-GDP ratio shows government will to ensure sustained fiscal space throughout the medium term," the statement read.

According to the DOF, the government borrowed more domestically – taking advantage of favorable local funding conditions – with 94 percent of the P554.7 billion gross borrowing for the year from the domestic market and the 6 percent were concessional foreign loans from development partners.

This helped reduce the foreign debt component to just P1.948 trillion or 34.3 percent of the total outstanding government debt.

A drop in local government debt to P71 billion from P73.4 billion in 2012 also helped improve the debt-to-GDP ratio.

The combined investment in government securities of the Government Service Insurance System and the Social Security System rose to P474.6 billion from P453.7 billion in 2012. — Danessa O. Rivera/JDS, GMA News