|
Government Mulls Upscaling the Budget Deficit by 0.04% |
|
Written by Federico Escalona
|
|
Tuesday, 13 July 2010 |
|
The Philippines’ national debt stood at P4.44 trillion as of the end of April 2010. This is slightly lower than the P4.46 trillion posted in March 2010 according to the Bureau of Treasury. Out of the outstanding debt pie around P1.89 trillion is owed to foreign creditors, representing about 43% of total debt while P2.55 trillion or 57% is owed to domestic creditors. It is being claimed by the Bureau of Treasurer that the slight decline of national debt, from March to April this year, may be attributed to the appreciation of the Philippine Peso. The stronger Peso resulted in a P33 billion decline in foreign debt servicing while the domestic debt increased by P11 billion due to net issuance of government securities.
The Bangko Sentral ng Pilipinas (BSP) maintains that increasing the deficit slightly the impact on public liability is construed to be modest, considering that it is at manageable levels (below 4%) when offset against Gross Domestic Product (GDP). Some economists feel that increasing the debt burden could lead to an undue strain on public finance. The BSP dispelled these fears that deficit spending would lead to an upward pressure on interest rates and that this sort of action could ultimately weaken the PESO.
|
