Recto: PH debt ‘not much of a concern’

The Philippines’ rising sovereign debt is not a pressing concern for newly appointed Finance Secretary Ralph Recto.

“Today, at 60%, I'm not that much concerned about the national debt,” Recto told reporters at a press briefing in Manila on Wednesday.

The Finance chief was referring to the debt-to-gross domestic product (GDP) ratio as of the third quarter of 2023 at 60.2%, which was an improvement from the 61% in the second quarter.

Debt-to-GDP ratio measures the amount of the government’s debt relative to the size of the economy.

A lower debt-to-GDP ratio indicates that the country can pay off its debt without having adverse impacts on the economy.

“It's your ability to pay that is important. It's not the size of the debt, but your ability to pay,” Recto said.

“Nominally, the debt looks high. It's P14.5 trillion, roughly 60% of GDP, which is very manageable,” he added.

As of end-November 2023, the country’s sovereign debt stock stood at a new record high of P14.51 trillion, up 0.19% from P14.48 trillion seen as of end-October 2023.

“The idea is to bring that down to 51% to 55%, more or less, so to cut the deficit every year by 1%, more or less. And like I said, there are two ways of doing that—raising taxes [and] a combination with growing the economy. So to me, I think you can raise more revenue by growing the economy faster,” Recto said.

“When you grow the economy, you broaden the tax base and you collect more taxes. So that's a general perspective. That's a general plan. So how do we grow the economy? So act faster on improving projects and getting more investment,” he added.

Under the administration’s Medium Term Fiscal Framework, the government aims to bring down the debt-to-GDP ratio to less than 60% by 2025 and further shrink it to 51.1% by 2028. —VAL, GMA Integrated News