The government has managed to trim its debt as a proportion of gross domestic product (GDP) despite a rise in value terms, the Finance department said on Tuesday.
Debt as a percentage of GDP dropped to 36.8 percent as of end-September 2015 from the 37.2 percent recorded a year earlier, the department said in a statement.
General government debt stood at P4.8 trillion during the period, up 5.1 percent from the P4.6 trillion posted in 2014.
“We still function in a very uncertain global environment. Keeping this ratio down is part and parcel of our commitment to keeping the Philippines resilient,” Finance Secretary Cesar Purisima said.
“We can expect the downtrend to persist further,” he added.
The government debt-to-GDP ratio is used by debt watchers to assess the creditworthiness of sovereigns.
Components of general government debt include the outstanding debt of the national government, the Central Bank Board of Liquidators, social security institutions and local governments, less intra-sector holdings of government securities including those held by the Bond Sinking Fund (BSF).
The Finance department said the rise in general government debt can be attributed to a P238-billion addition to outstanding national government debt (net of the BSF holdings).
Domestic borrowings rose by 5.5 percent to P2.8 trillion, while foreign debt increased by 4.5 percent to P2 trillion, “reflecting the impact of peso depreciation.”
Local government debt, meanwhile, slightly increased by 1.4 percent to P69.4 billion compared to last year’s P68.5 billion “due to higher loan availments.”
Social security institutions such as the Government Service Insurance System and the Social Security System did not contribute to the debt stock, but raised their holdings of government securities by 1.2 percent or P5.9 billion from last year.