DOF downplays debt warning on PH

With the Philippines being flagged as one of the developing countries that spent more than 10 percent of its income on debt repayments in 2023, the Department of Finance (DOF) argued that the fiscal strain stemming from mounting debt payments remains under control.

- DERCO ROSAL

"We’re managing it," DOF Secretary Ralph G. Recto told Manila Bulletin when asked if the government faces a challenge on the fiscal side due to the increasing debt payments.

"That's why we are doing fiscal consolidation—reducing the deficit every year while growing the economy," Recto said.

"What's important," he stressed, is that "we grow the economy faster than the growth of debt."

Similarly, National Treasurer Sharon P. Almanza told Manila Bulletin that the country's debt burden "remains manageable."

"Also, we expect that this will gradually improve as the government continues its commitment to fiscal consolidation coupled with prudent management of our debt portfolio," Almanza said.

As reported by the Manila Bulletin, rising post-pandemic debt repayments in developing economies across the region, including the Philippines, have been flagged by the Asian Development Bank Institute (ADBI). According to the Tokyo-based think tank, this setup deprives governments of more funding for public goods and services.