There is nothing wrong with government borrowings so long as the funds are earmarked for “productive use,” Budget Secretary Amenah Pangandaman said.
In a vlog uploaded on the official YouTube account of Senator Francis Tolentino over the weekend, Pangandaman said the government was forced to borrow at the height of the pandemic because of meager revenues.
“Noong nagkaroon po ng pandemic, nagkaroon po tayo ng malaking utang para po mapondohan ‘yung sa health sector natin. So, tumaas po ‘yung debt-to-GDP (gross domestic product) natin,” Pangandaman said.
“Sinusubukan po nating ibaba ang ating utang as a percent of GDP at ang ating deficit. Ang deficit po, kulang po ‘yung revenue mo so ‘yung balanse po, uutangin mo iyan. So lahat po ‘yun interconnected,” she added.
Given the limited fiscal space, the government has no choice but to borrow money and make sure that the move will increase potential returns, Pangandaman said.
Pangandaman also stressed that under the Marcos administration’s 2022-2028 Medium-Term Fiscal Framework (MTFF), the government aims to lower its debt-to-GDP and deficit-to-GDP.
Bringing down the national government’s debt-to-GDP ratio to less than 60 percent by 2025 and reducing the deficit-to-GDP ratio to 3 percent by 2028 are among the MTFF’s targets.
Pangandaman said the government would make sure that the projects that would be implemented are consistent with the Philippine Development Plan 2023-2028 and eight-point socioeconomic agenda.
The national government outstanding debt reached PHP14.15 trillion, as of end-June 2023, according to data from the Bureau of Treasury (BTr).
The BTr also reported that the national government’s budget deficit stood at PHP225.4 billion for June, 4.58 percent or PHP9.9 billion above the previous year’s level. (PNA)