Borrowing from Tomorrow

On July 23, President Ferdinand Marcos, Jr. had just arrived from a five-day official visit to the US, where he came home with US President Donald Trump's rather condescending final 19% tariff on Philippine exports to the US. It seems that there was no time for President Marcos Jr. to review and edit the State of the Nation Address (SONA) that he delivered on July 28, because he made no mention of the measly 1% tariff reduction grudgingly given by Trump, which might affect the vulnerable developing Philippine economy.

- AMELIA H.C. YLAGAN

He in fact started his SONA with, “...maganda ang ating ekonomiya (our economy is doing well).” He then promised several big infrastructure projects and socioeconomic programs, assured more classrooms and free health services, more jobs, more agriculture, more production. But where’s the money for these, coming from?

BusinessWorld’s alarming front page banner headline on July 31 urged focusing on an economy in distress: “PHL debt hits record-high P17.27 trillion.”

The National Debt is the total amount owed by the Philippine government (NG) to creditors such as international financial institutions, development partner-countries, banks, global bondholders and other investors.

Domestic debt, which comprises 69.2% of total debt, is composed of government securities, increased by 13% to P11.95 trillion as of end-June from P10.57 trillion in the same month last year.

Foreign debt is, at P4.91 trillion or 30.8% of the total, composed mainly of P2.71 trillion in government securities and P2.6 trillion in loans. External debt securities consisted of P2.29 trillion in US dollar bonds, P252 million in euro bonds, P59.32 billion in Japanese yen bonds, P56.38 billion in Islamic certificates, and P54.77 million in peso global bonds.

The Bureau of the Treasury said it prioritizes domestic borrowings because it is “consistent with the government’s goal to boost the local capital market while lowering foreign exchange risks and building investor trust in Philippine-issued securities,” BusinessWorld reported. Domestic borrowings of the Government are from the people and businesses directly.