Diokno says 50% debt-to-GDP ‘acceptable’

The Philippine debt could grow to as much as 50% of the gross domestic product (GDP) but this would still be "acceptable" given the "manageable" position of the country, the Bangko Sentral ng Pilipinas (BSP) said Thursday.

In a virtual press conference, BSP Governor Benjamin Diokno said the debt-to-GDP ratio is projected to climb from currently below 40% due to loans for coronavirus relief efforts.

"Our debt position is fairly manageable. It is at the moment slightly below 40% of GDP," he told reporters.

"Even with the amount of money that we're raising for this coronavirus crisis it will probably be up to around 45% so we can even go up to 50% and that is still acceptable," added Diokno.

A lower debt-to-GDP ratio is generally seen as favorable, as it indicates that the country is able to repay its debts.

The country ended April with a total outstanding debt of P8.6 trillion, according to the latest data available from the Bureau of Treasury.

In April, Finance Secretary Carlos Dominguez III said the administration raised its funding commitment to aid sectors impacted by the pandemic to P1.491 trillion, equivalent to 8% of the GDP as of 2019.

Prior to this, the government said it was looking to spend some P1.17 trillion for COVID-19 response measures, of which around P836.4 billion would be raised together with monetary authorities to support the economy. —LDF, GMA News