Philippines’ debt-to-GDP ratio to go down to 35%

MANILA: As the Duterte administration pivots to neighbouring economic giants such as China and Japan that offer financing for infrastructure projects, the share of foreign borrowings may exceed the government’s medium-term programme and reach 30% of the total, said the Philippines’ chief economist said.

Socioeconomic Planning Secre­tary Ernesto Pernia said the yearly borrowing programme of 80% domestic and 20% external until 2022 was a very safe mix of debt.

“We expect our debt-to-GDP (gross domestic product) ratio, which is currently on the border of 40% of GDP, to even go down to 35% in the coming years,” said Pernia, who is also the head of state planning agency National Economic and Develop­ment Authority.

Given the huge pledges of assistance as well as potential financing to be provided by the Chinese and Japanese governments, Pernia said the borrowing mix would likely change a bit such that foreign borrowings could hit up to 30% of the total. — Philippine Daily Inquirer/Asia News Network