Debt-to-GDP ratio up 44% on domestic borrowingshome/Business/Top Business/Debt-to-GDP ratio up 44% on domestic borrowingsDOMESTIC borrowings made by the national government pushed the Philippines’ debt-to-gross domestic product (GDP) ratio higher at end-March, the Department of Finance (DoF) reported on Thursday. National government debt as a percentage of GDP rose to 44 percent as of end-March from 42.6 percent a year ago, which the department attributed to the increase in domestic debt. Domestic borrowings totaling P5.196 trillion — up 6.1 percent from the previous month — accounted for the bulk of outstanding debt. In a comment, Bank of the Philippine Islands Vice President and lead economist Emilio Neri Jr. expressed concern on the impact of higher debt-to GDP ratio on the country’s credit-worthiness. “Net debt or debt net of cash balance is a stronger determinant of emerging country spreads than gross debt based on IMF Working Paper ‘Does Gross or Net Debt Matter More for Emerging Market Spreads?,’ Metodij Hadzi-Vaskov and Luca Antonio Ricci, December 2016,” it noted.

Source: Manila Times May 23, 2019 16:18 UTC