Gov’t eyes loans of P1.16 trillion in 2023 to cover budget deficit

The Philippine government would likely borrow more than P1 trillion to fill the anticipated budget deficit for the upcoming fiscal year, according to Finance Secretary Benjamin Diokno, the finance secretary.

Diokno stated that “total revenue projections in 2023 was P3.6 trillion” in comparison to a P5.268 trillion planned budget during budget briefings for the House of Representatives.

The Finance chief said that the “projected expenditures is P5.1 trillion and there will be a deficit of P1.16 trillion.”

He said that 75% of borrowings will come from domestic sources and 25% from outside.

The finance chief claimed that, despite the anticipated level of borrowing, the government’s borrowing needs will fall dramatically because it doesn’t look like we will have another pandemic in the near future.

Previously, the head of finance previously had declared that the government would no longer borrow as much as it did under the Duterte administration.

During the House hearing, Diokno remarked, “What is truly relevant is debt as a percentage of GDP (gross domestic product), the size of the economy, and that has been dropping.”

The debt-to-GDP ratio was 62.1% at the end of June 2022, down from the 63.5% debt level as a percentage of GDP in the first quarter of the year.

The national government’s debt stock stood at P12.79 trillion as of the end of June, the penultimate month of the Duterte administration, as the then-administration went on a borrowing binge to bolster state coffers in preparation for the COVID-19 epidemic.