The Philippines will use over 11% of the proposed national budget for 2023 to repay its debts, the Department of Finance said on August 25.
Philippine Finance Secretary Benjamin Diokn. (Photo: mb.com.ph)
Philippine Finance Secretary Benjamin Diokno said 11.6% of the budget, or roughly 10.9 billion USD, will be allocated for debt relief, including 10.4 billion USD for interest payments and roughly 500 million USD 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."
He 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% GDP growth rate in the second quarter of 2022.
The Philippine government aims to reduce the debt-to-GDP ratio to less than 60% by 2025 and cut the deficit-to-GDP ratio from the current 6.5% to 3.0% by 2028.
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% to 7.5% from 7% to 8% due to "recent external and domestic developments."
The Manila-based Asian Development Bank forecasts a 6.5% GDP growth in 2022 and 6.3% in 2023 for the Philippines./.