MANILA – The Philippine government’s improved debt guidelines have resulted in the drop of the country’s external debt ratios compared to around two decades ago, the Department of Finance (DOF) said.
In an economic bulletin, the DOF said the proportion of the country’s foreign debt to gross national income (GNI) rose to 25.2 percent as of end-2020 compared to 20.2 percent in the previous year due to higher government liabilities.
However, last year’s figure was significantly lower at 30.9 percentage points than the 56.1 percent in 2000, or when the country was recovering from the impact of the Asian financial crisis.
Amidst the year-on-year uptick, the DOF said the country’s latest external debt ratio is better than the 28.95 percent average among six Asian countries in 2019 based on World Bank (WB) data.
WB data show that 2019 external debt as a percentage of GNI of China is 14.77 percent; Indonesia, 19.74 percent; Philippines, 20.19 percent; Thailand, 34.42 percent; India, 37.03 percent; and Vietnam, 47.56 percent.
The DOF said the Philippines’ prudent debt policy has enabled the country to strengthen its defenses against external shocks like the coronavirus disease 2019 (Covid-19) pandemic.
“This is one of the reasons for the strong confidence of investors in the Philippine economy. Nevertheless, we must continue to prudently manage our fiscal situation and continue to observe fiscal responsibility,” it added. (PNA)
