Debt is top priority for Diokno as new Philippine Finance chief

MANILA (Bloomberg): Benjamin Diokno (pic), the Philippines’ next finance secretary and current central bank governor, said his priority next month when he takes on the new role is ensuring the government meets its debt obligations.

"Maybe the first item in the agenda will be the sustainability of our public debt,” Diokno said in a briefing Thursday (May 26) after his appointment was announced. This will assure credit-ratings agencies that the government is "serious about consolidating our fiscal resources, so that we’re able to reduce our debt- and deficit-to-GDP ratio over time,” he said.

President-elect Ferdinand Marcos Jr and his team face a deficit swollen by pandemic-era support programs and financing needs for planned infrastructure investments. Outgoing finance officials have warned against financing debt with additional borrowings.

The government’s debt-to-GDP ratio, which is currently above the 60% typically considered acceptable, isn’t a cause for concern, Diokno said. The economy can grow the 6% to 7% that’s needed to pare debt, he said.

Diokno, who served as budget secretary under two presidents before moving to the central bank in 2019, said he will also look at a fiscal consolidation proposal that includes taxes on products from digital services to single-use plastic bags. Marcos previously said he’s against new taxes.

Philippines watchers will likely see Diokno’s appointment as positive given his wealth of fiscal experience, Shreya Sodhani, economist at Barclays Bank Plc, wrote in a note.

"This is especially true given that little in terms of details is known about the new president’s plans for the economy, with fiscal consolidation being supported by the outgoing finance department.”

Article type: free
User access status:
Join our Telegram channel to get our Evening Alerts and breaking news highlights

Philippines , Diokno , debts , finance , secretary


Next In Aseanplus News

Thai tourism faces tough rebuild
Asean News Headlines at 9pm on Friday (July 1, 2022)
Singapore: Recall of 'Goods' banana cake from Malaysia over sorbic acid
Share accurate info on efforts to tackle economic issues, PM tells media
Indonesia and United Arab Emirates reach trade pact
Shell and Philippine partner to build 1 GW renewable energy capacity
Thai economy to show further improvement in June as curbs ease, says central bank
Singapore's new rules from July 2022 - Retirement age now 63, no more smoking in all public parks and higher Covid-19 care charges
Support for Sabah Bersatu waning, party forced to ‘cover up’ as GRS, says Najib
Putin offers Russian Railways investment in new Indonesia capital

Others Also Read