BUSINESS
Advocates Philippines
Philippines' National Debt Hits P16.05 Trillion - What Does It Mean For You?
FILE
The Philippine government’s total outstanding debt reached a staggering P16.05 trillion by the end of 2024. That’s P1.44 trillion higher than the previous year, marking a 9.8% increase. But before you start worrying about all those zeroes, let’s break down what this really means.
Debt, GDP, and What’s Behind the Numbers
The debt-to-GDP ratio—essentially how much we owe compared to the size of the economy—landed at 60.7%, just slightly above the government’s 60.6% target. Why? The country’s GDP growth was a bit lower than expected at 5.6%, meaning the economy didn't expand as much as hoped. However, government officials see this as manageable, thanks to careful budgeting and debt management.
Where Is the Debt Coming From?
Most of this debt came from the government issuing bonds and borrowing money to fund projects and cover the budget deficit. Here’s a quick breakdown:
Domestic debt: P10.93 trillion (or 68.1% of total debt)
External debt: P5.12 trillion (or 31.9%)
The bulk of the increase came from borrowing within the country, while the strong US dollar also made foreign debt more expensive in peso terms. Interestingly, some shifts in exchange rates actually helped reduce debt by P80.74 billion—a small silver lining!
What About Month-to-Month Changes?
Domestic debt rose slightly in December, mainly due to additional borrowing.
External debt actually dropped by P48.41 billion from November, thanks to currency fluctuations.
Government-guaranteed debt (loans backed by the government) shrunk by 0.8% to P346.66 billion, meaning fewer obligations that could strain public funds.
So, Should We Be Worried?
While P16.05 trillion is a jaw-dropping number, the good news is that it’s still within projections. The government is keeping a close eye on borrowing, ensuring it doesn’t spiral out of control. The key now is boosting economic growth so the country can manage and eventually reduce this debt burden.
For everyday Filipinos, this means the government will likely continue balancing spending and borrowing, which could impact everything from tax policies to infrastructure projects. Will we see new economic measures to boost growth? That’s something to watch for in 2025!
Debt, GDP, and What’s Behind the Numbers
The debt-to-GDP ratio—essentially how much we owe compared to the size of the economy—landed at 60.7%, just slightly above the government’s 60.6% target. Why? The country’s GDP growth was a bit lower than expected at 5.6%, meaning the economy didn't expand as much as hoped. However, government officials see this as manageable, thanks to careful budgeting and debt management.
Where Is the Debt Coming From?
Most of this debt came from the government issuing bonds and borrowing money to fund projects and cover the budget deficit. Here’s a quick breakdown:
Domestic debt: P10.93 trillion (or 68.1% of total debt)
External debt: P5.12 trillion (or 31.9%)
The bulk of the increase came from borrowing within the country, while the strong US dollar also made foreign debt more expensive in peso terms. Interestingly, some shifts in exchange rates actually helped reduce debt by P80.74 billion—a small silver lining!
What About Month-to-Month Changes?
Domestic debt rose slightly in December, mainly due to additional borrowing.
External debt actually dropped by P48.41 billion from November, thanks to currency fluctuations.
Government-guaranteed debt (loans backed by the government) shrunk by 0.8% to P346.66 billion, meaning fewer obligations that could strain public funds.
So, Should We Be Worried?
While P16.05 trillion is a jaw-dropping number, the good news is that it’s still within projections. The government is keeping a close eye on borrowing, ensuring it doesn’t spiral out of control. The key now is boosting economic growth so the country can manage and eventually reduce this debt burden.
For everyday Filipinos, this means the government will likely continue balancing spending and borrowing, which could impact everything from tax policies to infrastructure projects. Will we see new economic measures to boost growth? That’s something to watch for in 2025!
Feb 4, 2025
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