PH debt load rose 9.8 percent to P16.05T in ʼ24
- The country’s outstanding debt reached 60.7 percent of gross domestic product last year due to the underwhelming economic growth of 5.6 percent, which fell short of the 6 to 6.5 percent target of the Marcos administration.
- Local borrowings, which accounted for the bulk of the debt load, rose by P912.49 billion to P10.93 trillion in 2024.
- The state had borrowed P905.31 billion more than it paid domestically last year, while a volatile currency increased the peso-value of foreign currency-denominated onshore debts by P7.18 billion.
- The government’s outstanding debt is projected to rise to P17.35 trillion by the end of 2025.
The government capped 2024 with an outstanding debt of P16.05 trillion, equivalent to 60.7 percent of gross domestic product (GDP), with a fast reduction of liabilities seen politically and fiscally impossible.
Data from the Bureau of the Treasury (BTr) showed the debt pile went up by 9.8 percent or P1.44 trillion year-on-year in 2024. But total obligations settled below the P16.06-trillion projection of the Marcos administration for 2024.
At the same time, the latest debt-to-GDP ratio, a gauge of the government’s ability to settle its liabilities, was a tad higher than the official program of 60.6 percent.
As a rule of thumb, a country with a debt-to-GDP ratio of 60 percent or lower is considered fiscally responsible.
The BTr said the above-target debt-to-GDP ratio was due to the underwhelming economic growth of 5.6 percent in 2024, which fell short of the 6 to 6.5 percent target of the Marcos administration.
But the Treasury said the “minimal deviation” from the target showed the government’s “effective cash and debt management strategies” even amid a volatile foreign exchange rate environment.
Broken down, local borrowings, which accounted for the bulk of the debt load, rose by P912.49 billion to P10.93 trillion in 2024.
Volatile currency
The Treasury said the state had borrowed P905.31 billion more than it paid domestically last year. Meanwhile, a volatile currency increased the peso-value of foreign currency-denominated onshore debts by P7.18 billion.
External debts jumped by 11.4 percent to P5.12 trillion last year on the back of net foreign financing amounting to P401.74 billion, figures showed. This, while the peso’s weakness had bloated foreign borrowings by P201.55 billion.
For this year, the Marcos administration is targeting to borrow P2.55 trillion from creditors at home and abroad to plug a projected budget hole amounting to P1.54 trillion, or equivalent to 5.3 percent of the country’s gross domestic product.
By sources of financing, the government will borrow P507.41 billion from foreign investors. The remaining P2.04 trillion is targeted to be raised domestically.
All of this, in turn, is expected to push the government’s outstanding debt to P17.35 trillion by the end of 2025.
