3Q 2013 General Government Debt to GDP improves to 39.7% from 44.3% in 2009
Purisima: Proactive debt management creates fiscal space, strengthens fundamentals
As of September 2013, the country’s General Government (GG) Debt stood at P4.468 trillion or 39.7% of GDP, lower than 40.3% as of September 2012. The current GG debt is P4.468 trillion or 39.7% of GDP, slightly up quarter-on-quarter from P4.315 trillion or 39.1% of GDP as of June 2013, but has improved significantly since President Aquino took office in 2010.
“Before President Aquino took office, GG debt to GDP was 44.3% in 2009. By reducing government debt, we are attempting to ensure the sustainability of our recent economic resurgence,” Finance Secretary Cesar V. Purisima said.
“The Aquino Administration continues working towards the virtuous cycle of good governance through proactive liability management. As a result of these initiatives, we are creating fiscal space in the budget to increase investments in our people, our key driver of economic growth,” Purisima added.
GG debt went down as the National Government (NG) purchased more debt from domestic sources at cheaper interest and longer maturities. Of the total NG debt as of 3Q 2013, 66% is domestic and 34% is foreign, a number that has improved over the previous year, at a debt mix of 61% domestic – 39% foreign. The GG debt mix has notably improved from 51% domestic – 48% foreign as of 3Q 2012 to 59% domestic – 41% foreign as of 3Q 2013.
A decline in Local Government Unit debt to P70.7 billion, or 0.6% of GDP, as compared to the September 2012 level of P71.3 billion, or 0.7% of GDP, also contributed to the decline in GG debt.
GG debt is computed as National Government less the NG debt held by the Bond Sinking Fund (BSF). To this number is added the debt of Social Security Institutions (SSIs, e.g., GSIS, SSS and PhilHealth) and the Local Government Units (LGUs), and finally deducting intra-sector debt holdings. Intra-sector debt holdings are the NG debt held by SSIs, LGUs, and LGU debt held by the Municipal Development Fund Office (MDFO).
DOF Media Ref No. 13-014