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EVEN before the Covid-19 pandemic, the Philippines was already listed as one of the top borrowers in the East Asia and Pacific region, according to the International Debt Statistics 2021 report.
The report (excluding China) listed the Philippines, Indonesia and Thailand as the top borrowers in the region with an average increase of 5% to 6% in their external debt between 2015 and 2019.
The total external debt of the 120 low- and middle-income countries increased 5.4 percent in 2019 to $ 8.1 trillion, equivalent to 26 percent of their gross national income (GNI), according to the report, released by the International Bank for Reconstruction and Development (IBRD).
“The volume of external debt increased by 6.4 percent in East Asia and the Pacific, excluding China, and the main borrowers [Indonesia, the Philippines and Thailand] all registered an increase of 5 to 6 percent, “the report said.
According to the report, the Philippines’ total external debt surpassed the $ 80 billion level for the first time last year to $ 83.661 billion, an increase of 5.9 percent from 2018.
Before 2019, the country’s total external debt reached $ 78,997 million in 2018; $ 73,414 billion in 2017; $ 74.739 billion in 2016; and $ 76,266 billion in 2015.
The World Bank’s Debt Data Team recently said that nearly a third of low- and middle-income countries had an external debt-to-GNI ratio of greater than 60 percent at the end of 2019, compared to 23 percent in 2010.
In 9 percent of countries, the proportion exceeded 100 percent, the team said. This is a third more than the proportion of countries with a comparable proportion in 2010.
“Country-specific indicators vary widely, but several low- and middle-income countries have seen a marked increase in the ratio of external debt to GNI. This share has increased over the past decade in many low- and middle-income countries, ”the World Bank’s Debt Data Team said in a blog.
DBCC projection
Earlier, the Cabinet-level Development Budget Coordination Committee (DBCC) said it expects the country’s debt-to-GDP ratio to rise to 53.91 percent of GDP, a level it has not seen in more than a decade, from a record low of 39.6 percent of GDP last year.
By 2021 and 2022, it is projected to increase to 58.1 percent and 59.9 percent, respectively. The debt-to-GDP ratio is used to measure the country’s ability to pay its debts.
The Treasury Office (BTr) recently reported that January-August debt payments increased 49.35 percent year-on-year to P760.65 billion, from P509.295 billion in the same period last year, while the country fights against the Covid-19 pandemic.
The amount paid by the government during the eight-month period is also close to the total amount it paid for the entire year 2019 at P842,449 million.
This, since the state debt payments for the month of August of this year increased almost five times to P152,396 billion from P31,581 billion in the same month of 2019.
