The Philippines: DOF rejects ceiling on debt-to-GDP ratio

  • The Department of Finance (DOF) has opposed a proposal seeking to enforce a debt ceiling of 50% of gross domestic product (GDP), warning this may hinder spending for recovery efforts in times of crisis.
  • Finance Secretary Carlos Dominguez III 6 Sep 21 said the DOF sees no need for lawmakers to legislate a debt cap, as the government may be prevented from seeking financing in crisis periods.
  • The government has added PHP1.81tr to the debt pile from Jan 21 to Jul 21, widening the outstanding debt to a fresh record of PHP11.61tr as of end-Jul 21.
  • The debt stock has translated to 60.4% of GDP as of 1H21, exceeding the 60% threshold recommended by the international community, including multilateral lenders.

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