Finance chief sees Philippine economic growth to outgrow debt
The Philippine economic growth is expected to outgrow its debt, contrary to those projecting the country would be in a "debt crisis" due to its utilization of the official development assistance, Finance Secretary Carlos Dominguez III said on Friday.
The Department of Finance chief said debt-to-GDP (gross domestic product) ratio was steady at 42.1 percent in 2017 and is expected to decline to 39 percent in 2022 due to prudent management of government's obligations and "rapid expansion" of the domestic economy.
"Given the rapid expansion of our GDP, we will certainly outgrow our debt. Those who raise the specter of a debt crisis arising from our use of official development assistance to finance our infrastructure program are not reading the numbers well enough," he said during the first in a series of forum in preparation for President Rodrigo Duterte's State of the Nation Address on July 23.
Entitled "Tatak ng Pagbabago: Tatak ng Pag-unlad," the forum on Friday held in Pasay City focused on the Economic Development Cabinet Cluster and the Infrastructure Cabinet Cluster that aimed to inform the public on the efforts and accomplishments of the administration for the previous year.
Some quarters have raised concern the Philippines could fall into a "debt trap" due to its heavy reliance on ODA.
The Philippines has lined up 75 flagship infrastructure projects under its Build, Build, Build program.
According to Socioeconomic Planning Secretary Ernesto Pernia, the government has already hit the ground running as it envisions the completion of 32 of 75 flagship projects by end-2022.
The Duterte administration has signed several agreements with Japan to fund some of the major projects.
It is also seeking loans from China for other undertakings.
Dominguez cited the Philippine record high foreign direct investments of $10 billion in 2017 and the sustained economic expansion, which was at 6.8 percent in the first quarter.
"We hope to achieve a faster rate for the rest of the year to bring us closer to the 7 percent target," he said.
But Dominguez also cited some risks on the economy, particularly external factors.
"The global economy, to be sure, could pose numerous challenges to our growth in the coming period. We are looking at the possibility of increased protectionism and some uncertainty that could affect oil prices," he said.
"A full-fledged trade war could impair the global economy's capacity to grow," he added, apparently referring to the United States and China. Celerina Monte/DMS
