Data from the Budget Department showed that the PH debt would begin to increase in the next few months to end at around ₱10.16 trillion by December.
As of June, the national government’s outstanding loans totaled about ₱9.05 trillion. It was adding about ₱1.3 trillion in the first six months. Last year, the PH debt amounted to around ₱7.73 trillion.
It is projected that domestic loans will reach some ₱6.9 trillion. Meanwhile, by December, international loans that accounted for a fourth of the amount will be worth some ₱3.25 trillion.
Duterte Has Prepared the National Budget in 2021
The approximately is about ₱4,506-trillion national budget for 2021. President Rodrigo Duterte said this year and for 2021, there will be the “important blow” dealt with economic activity. Because of the COVID-19 crisis, the economic team has tempered revenue collection targets.
This will leave a funding gap worth ₱1.8 trillion or nearly a tenth of gross domestic product (GDP). In addition, it will have to be financed through borrowed money.
“From consistently managing and maintaining our deficit relative to GDP at conservative levels at 3 percent of GDP, the decision has been made. In addition, it aimed to break from tradition and increase deficit financing. It is necessary — and it is justified,” Duterte said.
“When tax revenue collections are dwindling — and when government spending is most critically needed — the government has to resort to deficit spending.”
The government is expected to borrow about ₱3 trillion more for 2021, bringing the year-end debt to around ₱11.98 trillion more. However, a compromise is that the country will depend less on foreign lenders and produce just 15 percent of the total abroad. Locally, the largest chunk, equal to some ₱8.5 trillion.
Duterte said this policy eliminates the risks from volatility in the exchange rate. Hence, it could add to the value of the country’s debt. By 2021, the debt burden for the nation would be 53.9 percent of GDP.
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