Pimentel disagrees with Diokno on 'manageable debt' remark

Senate Minority Leader Aquilino "Koko" Pimentel III on Thursday opposed Finance Secretary Benjamin Diokno's latest remark that the country's debt is "manageable" and should not be a cause for concern.

"Ay hindi. Ako, matagal na akong hindi nakakatulog dahil dyan. So kailangan nakatutok tayo dyan," Pimentel said in a virtual interview when asked about Diokno's statement.

"I-monitor natin kasi...at one point naging 39% 'yan e 'yung ratio—our debt to our GDP—pero isang pangyayari lamang ['yung] pandemic, akyat agad sa 63%. So ganyan ka-fragile 'yung mga ratio na 'yan," he added.

Pimentel said the Finance secretary should base his remark on the absolute number or the real amount of the country's outstanding debt and not on the debt to gross domestic product (GDP) ratio, which are mere estimates.

"Ang sinasabi niya, 'We will outgrow our debt.' ibig sabihin n'on nakatingin siya sa ratio but ang utang natin is not the ratio. Ang utang natin is a number, ang number n'on is P13 trillion and going to P14 trillion by the end of this year," he said.

"If we can outgrow our debt, how come hindi natin napapakita over time? Dapat bumababa siya over time. 'Wag tayo sa ratio magpakuha ng ating atensyon," he said.

GMA News Online sought Diokno's comment on the matter but he has yet to issue a reply as of posting time.

During a Commission on Appointments hearing Wednesday, Diokno explained that the debt-to-GDP ratio increased from 40% before the pandemic to 62% during the pandemic due to the vaccine procurement and improvement of health services, among others.

"That should not be a cause for concern—62%. That’s very manageable compared to other countries [whose] debt-to-GDP ratio is 200 percent," Diokno added.

As of end-September this year, the debt-to-GDP ratio—the amount of the government’s debt stock relative to the size of the economy—rose to 63.7% from 62.1% in the second quarter of 2022.

This is the highest debt-to-GDP ratio since 2005, when it hit 65.7%, well over the internationally recommended threshold of 60%.

The country’s debt, meanwhile, swelled to a new record high of P13.517 trillion as of the end of September 2022, as the government issued securities to raise funds to support the budget, coupled with the peso’s weakening against the US dollar.

Diokno earlier announced that the administration aims to bring down the debt-to-GDP ratio to 52.5% by 2028.

The debt-to-economy level is intended to decline continuously to 61.8% in 2022, 61.3% next year, 60.6% by 2024, and 59.3% by 2025. 

Meanwhile, Pimentel gave three reasons why he voted in favor of the 2023 national budget, but with reservations.

Topping his list was the supposed lack of transparency in the budget presentation, specifically in the unprogrammed appropriations.

"Ang public pronouncement nila na ang budget next year is just a four-percent increase ng budget this year. Yan eh kung nakatingin lang tayo sa so-called programmed appropriation," he said.

"Eh parang ini-ignore nila, when you say budget, merong unprogrammed appropriations na nafa-fund din naman ang karamihan doon. Ginagastusan din naman ang karamihan doon eh... Makikita natin na 'yung increase ay 11 percent. Not four percent," he added.

Apart from this, Pimentel said there is around P1 trillion for the principal payments on debts, which were not spelled out in the budget measure.

"So next year ang authority to spend ng gobyerno would be P5.2 trillion sa programmed, plus P588 billion sa unprogrammed—although lumaki yun. Di ko na mabigay yung final amount, plus P1 trillion o ilan na yun-- P6 to 7 trillion na gagastusin po next year," he said.

He again expressed reservations about the confidential and intelligence funds that were retained in the Senate version.

Although he understands that there is "give and take" in the lawmaking process, Pimentel insisted that civilian agencies that have no surveillance mandate should not be given confidential funds.

Lastly, Pimentel lamented that the funding for the health workers' benefits, senior citizens' additional pension, and reimbursements for the Philippine Postal Corporation were lodged under the unprogrammed appropriations.

"Natutuwa tayo nabigyan ng fund, nilagay naman sa unprogrammed appropriations. Ibig sabihin nun, contingent 'yun. Di sure na mabibigyan ng funding yun dahil hahanapan pa kung saan pwedeng pag utangan para dun eh," Pimentel said.

"Sana hindi maging illusion. Hindi maging illusory yun. Kasi pag napasa yung budget, ‘Uy kasama tayo senior citizens. Kasama tayo.' Kasama sa budget nga pero hindi pa tayo sure ng actual expenditure doon kasi nga uutangin pa yun or hahanapan pa [ng pondo]," he added.

Budgetary items that fall under unprogrammed appropriations will only be funded if there are excess revenues or government collections, or if the government receives funds from loans or grants. —AOL/VBL, GMA Integrated News