"Government's Debt Reaches P16.05 Trillion" However, considering the content of the post, a more descriptive and attention-grabbing title could be "National Government Debt Hits Record High P16.05 trillion Outstanding Debt and What It Means for the Economy" or "Debt on the Rise National Government's Debt Reaches P16.05 Trillion as GDP Ratio Surpasses Targeted Level" These titles are more informative and provide a clearer idea of what the post is about, making them more effective at grabbing readers' attention.

Government's Debt Reaches P16.05 Trillion

As the national government concludes 2024, a report reveals that its outstanding debt has reached a staggering P16.05 trillion, with an additional P1.44 trillion added from the previous year. This significant increase brings the country's debt-to-gross domestic product (GDP) ratio up to 60.7%, exceeding the targeted 60.6% in the government's medium-term fiscal framework.

Notwithstanding this uptick, the Treasury credits the national government's effective cash and debt management strategies as key factors in maintaining a minimal deviation from the programmed debt. This proactive approach has enabled the government to manage external debt issuances amid volatile exchange rate environments.

Government Aims to Trim Debt-to-GDP Ratio

The government is committed to achieving a debt-to-GDP ratio of 60.4% by the end of this year and 56.3% by 2028. Additionally, it aims to reduce the deficit-to-GDP ratio to 3.7% by 2028 while maintaining infrastructure spending at 5-6% of GDP per year.

Breakdown of National Government's Debt

The national government's domestic debt stood at P10.93 trillion, a 0.1% increase from the end-November level. Net borrowing added P10.91 billion, while the valuation effect of a stronger US dollar tempered the increase by P2.16 billion.

Domestic debt comprised 68.1% of the total debt stock and rose by P912.49 billion or 9.1% year on year due to net issuance of domestic securities and depreciation increasing the peso valuation of outstanding foreign currency-denominated domestic securities.

External Debt

External debt, which accounted for 31.9% of the total debt, decreased by P48.41 billion or 0.9% compared to the previous month. This was mainly attributed to local- and third-currency fluctuations that reduced the peso valuation of foreign currency-denominated debt by P66.60 billion and P30.68 billion, respectively.

Year on year, external debt increased by P522.55 billion or 11.4%. Guarantees obligations decreased by P2.78 billion or 0.8% to P346.66 billion year on year.

Fitch Ratings Warns of Limited Scope for Faster Debt Reduction

As the government focuses on economic growth and midterm elections, Fitch Ratings warns that the scope for faster debt reduction will be limited. However, it expects the debt-to-GDP ratio to decline this year due to strong growth.

Conclusion

In conclusion, the national government's debt stands at P16.05 trillion, with a debt-to-GDP ratio of 60.7%. While there is room for improvement, the Treasury highlights the NG's effective cash and debt management strategies as key factors in maintaining a minimal deviation from the programmed debt. The government aims to trim its debt-to-GDP ratio by the end of this year and 56.3% by 2028. As the government prioritizes economic growth and midterm elections, it remains to be seen how it will approach debt reduction in the coming years.

Keywords National Government Debt, GDP Ratio, Treasury, Medium-term Fiscal Framework

Edward Lance Arellano Lorilla

CEO / Co-Founder

Enjoy the little things in life. For one day, you may look back and realize they were the big things. Many of life's failures are people who did not realize how close they were to success when they gave up.