MANILA (Xinhua) – The Philippines will use over 11 per cent of the proposed national budget for 2023 to repay its debts, the Department of Finance said yesterday.
Philippine Finance Secretary Benjamin Diokno said 11.6 per cent of the budget, or roughly USD10.9 billion, is allocated for debt relief, including USD10.4 billion for interest payments and roughly USD500 million for net lending.
Diokno said that the national debt remains “within manageable levels”, adding that most of the national debt “is long-term, spread out, and set at the lowest possible rate”.
As of end-June, the Southeast Asian country’s national government debt stood at USD228.39 billion dollars, equivalent to 62.1 per cent of its gross domestic product (GDP).
The government aims to reduce the debt-to-GDP ratio to less than 60 per cent by 2025 and cut the deficit-to-GDP ratio from the current 6.5 per cent to 3.0 per cent by 2028.
Diokno said that the structural reforms and enhanced tax system instituted by the previous administration ensure that the government can meet its obligations.
He expressed confidence that government revenues will continue to pick up, and the deficit will decrease on the back of a strong economy, as demonstrated by a broad-based 7.4 per cent GDP growth rate in the second quarter of 2022.
In July, days after Philippine President Ferdinand Romualdez Marcos took office, the new administration lowered its GDP target band for this year to 6.5 per cent to 7.5 per cent from seven per cent to eight per cent due to “recent external and domestic developments”.
The Manila-based Asian Development Bank forecasts a 6.5-per-cent GDP growth in 2022 and 6.3 per cent in 2023 for the Philippines.