PH may need 10 years to lower debt-to-GDP ratio

The Philippines may need at least 10 years to revert its debt-to-gross domestic product (GDP) ratio to its pre-pandemic level of 40%.

Finance Secretary Carlos G. Dominguez III stated that the country could take a minimum of 10 years to get back on track, attributing this to the effects of COVID-19.

The Philippines' debt pile ballooned to a record P12.76 trillion as of the end of April, financing its pandemic response.

The country's debt-to-GDP ratio stood at 63.5% as of the end of the first quarter, exceeding the 60% threshold considered manageable by multilateral lenders for developing economies.

This is a substantial increase from the 39.6% recorded in 2019.

The Philippine Institute for Development Studies (PIDS) estimates the debt-to-GDP ratio could peak as high as 66.8% by 2023 and 2024, before falling to 65.7% by 2026.

PIDS presented a report on the fiscal effect of the COVID-19 on the country, outlining three scenarios for achieving the 40% debt-to-GDP ratio.