Thailand
Philippines: 6% growth needed
ECONOMIC growth should top 6.0 percent over the next five years for the Philippines to pay off pandemic-related debt, Finance Secretary Carlos Dominguez 3rd said on Thursday.
“The biggest challenge for the next administration is really to grow out of the debt that we incurred during the pandemic,” he said in a Bloomberg interview.
The borrowings, he added, were “natural because our revenues went down due to the lockdowns and we had increased expenditures, so we had to borrow more money.”
Dominguez went on to say that the next administration, which will take office on June 30 this year, would have to establish requisite policies and adhere to tight budgetary discipline.
While emphasizing that the Philippines still has everything in place for an economic recovery, he acknowledged that the ongoing Russia–Ukraine war would have an impact.
“Although we’re not combatant, we’re affected by the increase in prices of fuel, of grain,” Dominguez noted.
Still, the Finance chief voiced confidence in the country’s ability to service its debt, noting “very favorable terms” in terms of tenor and interest rates.
“So we’re not worried about the repayment, but we have to really grow out of the debt. In other words, expand our economy by better than 6 percent per year over the next five or six years,” Dominguez said.
Economic managers are targeting 7.0- to 9.0-percent growth this year, up from 5.6 percent in 2021.
National government debt has hit record highs under the pandemic, with the debt-to-gross domestic product ratio widening to 60.5 percent last year from 54.6 percent in 2020.
In value terms, debt totaled P11.73 trillion at the end of 2021. It hit a fresh high of P12.09 trillion as of end-February this year.
Outstanding debt has been programmed to reach P13.41 trillion this year, with P9.40 trillion comprising domestic commitments and international liabilities taking up P4.01 trillion.
Source: https://www.manilatimes.net/2022/04/22/business/top-business/6-growth-needed/1840793