Philippine government debt as a ratio of the country’s gross domestic product (GDP) dropped to 39.2 percent in 2013 from 40.6 percent the year earlier amid fiscal consolidation and robust economic expansion, the Department of Finance (DOF) said on Friday.
DOF data shows that as of December 2013, general government debt stood at P4.53 trillion, or 39.2 percent of GDP.
General government debt includes outstanding debt of the national government, the Central Bank Board of Liquidators, social security institutions and local governments, less the intra-sector holdings of government securities including those held by the Bond Sinking Fund.
The DOF attributed the decline in government debt to ongoing fiscal consolidation and robust economic expansion.
It noted that the deficit-to-GDP ratio in 2013 was only 1.3 percent, while the Philippine economy expanded by 7.2 percent that year.
“Moreover, the national government took advantage of broadly favorable domestic funding conditions in 2013 to redenominate away from foreign currency debt,” it said.
Of the P554.7 billion in gross borrowings for the year, 94 percent was sourced from the domestic market while the remaining 6 percent consisted of con–cessional foreign loans from development partners.
This helped reduce the foreign debt component of government debt to just P1.95 trillion, or 34.3 percent of the total outstanding government debt, the DOF said.
It said the decline of local government debt in 2013 to P71.0 billion from P73.4 billion in 2012 also contributed to the improved government debt-to-GDP ratio.
It noted that intra-sector debt holdings of local governments were trimmed down to just P300 million in 2013 from P3.1 billion in 2012.
Meanwhile, the DOF said that combined investments in government securities of the Government Service Insurance System and the Social Security System rose to P474.6 billion in 2013 from P453.7 billion in 2012.