THE National Government’s (NG) debt as a share of gross domestic product (GDP) was 61.3% at the end of the third quarter, the Bureau of the Treasury (BTr) said Thursday.
This was higher than the year-earlier 60.2% and the 60.1% posted at the end of 2023, the BTr said in a statement.
In 2024, the debt-to-GDP ratio target was set at 60.6%. The government seeks to bring this to below 60% by 2028.
The threshold considered by multilateral lenders to be manageable for developing economies is 60%.
“The debt ratio reflects the accomplishment of 89.5% of the full-year borrowing program to fund 2024 expenditures,” the BTr said.
At the end of September, the NG’s outstanding debt rose to a record P15.89 trillion, up 2.2% from a month earlier.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that the rise in the debt-to-GDP was due to the increased borrowing by the NG as well as slower-than-expected growth.
The economy grew 5.2% in the third quarter, the weakest reading since the 4.3% posted in the second quarter of 2023.
Meanwhile, the Treasury said the deficit-to-GDP ratio fell to 5.1% at end-September from 5.7% a year earlier and 6.2% at the end of last year.
The indicator fell below the 5.6% deficit ceiling set by the government this year.
The Treasury reported that the budget deficit narrowed 1.35% to P970.2 billion in the first nine months.
Mr. Ricafort said that bringing down the debt-to-GDP ratio to below 60% would help “sustain the country’s favorable credit ratings of 1-3 notches above the minimum investment grade, to help better manage and sustain the country’s fiscal performance and overall debt management over the long-term and for the coming generations.”
“Achieving this would require narrower budget deficits, intensified tax revenue collection, and more disciplined government spending,” he added. — Aubrey Rose A. Inosante