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Philippines saddled with record debt after Duterte



The Philippines’ public debt hit a record 12.79 trillion pesos ($230.3 billion) when former President Rodrigo Duterte stepped down at the end of June, data released by the Treasury Department on Aug. 5 showed. The figure rose 14.6 percent annually, surpassing the previous record of 12.76 trillion pesos set in April and 12.5 trillion pesos set in May. It also reflects the doubling of the government’s P5.95 trillion loan outstanding when Duterte began his six-year term in June 2016. Of the total debt for the period, 68.5…

The Philippines’ public debt hit a record 12.79 trillion pesos ($230.3 billion) when former President Rodrigo Duterte stepped down at the end of June, data released by the Treasury Department on Aug. 5 showed.

The figure rose 14.6 percent annually, surpassing the previous record of 12.76 trillion pesos set in April and 12.5 trillion pesos set in May.

It also reflects the doubling of the government’s P5.95 trillion loan outstanding when Duterte began his six-year term in June 2016.

Of the total debt during the period, 68.5% came from local sources, while the remaining 31.5% came from external sources, the data showed.

expansionary fiscal policy

The reason for the high debt can be seen in the previous government’s expansionary fiscal policy to help fund its ambitious flagship infrastructure programme, Build Build, Build. It has further increased borrowing during the Covid-19 pandemic, which has impacted the government’s ability to tax revenue as strict restrictions dampen economic activity.

Philippine Finance Secretary Benjamin Diokno said debt levels during the Duterte administration will “no longer” be present in the current regime of Ferdinand Marcos Jr.

Marcos has vowed that by 2025, the government will reduce the national debt-to-GDP ratio from the current 63.5% to below 60%, the highest level in 17 years and well above the internationally recommended threshold of 60%. economy.

tax, tax, tax

Diokno said he was satisfied with the last two tax reform packages left by the Duterte administration, namely the Real Estate Valuation Tax and the Passive Income Tax and Finance Tax.

The Marcos administration is further seeking to tax digital transactions that could generate 11.7 billion pesos next year.

“The government may also strengthen fiscal discipline and even tighten government spending through anti-corruption, anti-waste and anti-leak measures, as well as an investment approach to government spending in areas such as education, health and infrastructure,” said chief economist at Rizal Commercial Banking Corporation According to scientist Michael Ricafort, according to GMA News.

“This will help further increase the productivity of the economy and long-term benefits and returns for future generations,” he added.



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