DOF: P15.4T debt if gov't yielded to stimulus proposals

The Department of Finance (DOF) stated that the Philippines' public debt would have reached P15.4 trillion by the end of 2022 if the government had yielded to proposals such as spending more on pandemic relief and suspending the fuel excise tax.

DOF chief economist Gil Beltran explained that the state's debt pile would have been P2.2 trillion more than the projected P13.2 trillion by year-end if the government had not exercised fiscal prudence and bowed to legislators' pressure to pass all fiscal stimulus bills.

He cited proposed measures that would have further bloated the government's debt, including VAT exemptions for oil and other commodities, various COVID-19 stimulus bills and subsidies, and proposed exclusions of certain bonuses from taxable income.

The government maintained fiscal prudence throughout the pandemic, spending only what was affordable.

Despite a targeted economic growth of 7-8% for 2022, the debt-to-GDP ratio was expected to rise to 60.9%.

The debt-to-GDP ratio already stood at 63.5% in the first quarter of 2022, exceeding the manageable threshold for emerging markets.