‘Low debt ratio to delay structural reforms, dent growth’
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n aggressive return to the prepandemic debt ratio of below 40 percent may be detrimental to the country’s economic growth and cause delay in structural reforms, according to the Bureau of the Treasury (BTr). In its 2023 Annual Report, the BTr said the country’s debt-toGDP ratio has remained elevated. The current debt level, however, is lower than the historical high of 71.6 percent in 2004. The BTr said the national government recorded a 60.1 percent debt-to-GDP ratio in 2023. This is expected to reach 60.2 percent this year. “It should also be said that an aggressive return to the prepandemic debt-to-GDP ratio of
39.6 percent is technically and politica l ly infeasible, as this would require a more dramatic fiscal adjustment where the NG [national government] must run consistent budgetary surpluses,” the report read. “[This] would deprive the country of the needed public investments to take advantage of its demographic trends and structural reforms to improve its business climate,” it added. Based on the report, the country’s debts were composed of 68.5 percent domestic debts and 31.5 percent foreign debts in 2023. These debts, the BTr data also showed, were composed of 79.4 long term debts in 2023 or those that are expected to mature be-
yond 5 years. The rest or around 16.9 percent were composed of debts that will mature in 1 to 5 years and 3.7 percent are expected to mature within a year. Compared to last year, the country’s long-term debts in 2023 were higher than the 74.7 percent share in 2022. However, in terms of mediumand short-term loans in 2023, these were lower than the 22.3 percent share of medium-term loans and 3.1-percent share recorded for short-term debts. The Philippines’s outstanding debt as a share of its overall economy climbed to 61.3 percent as of the third quarter of 2024, above the government’s target
and global benchmark as economic growth slowed during the period. Latest data from the Bureau of the Treasury (BTr) showed the latest debt-to-GDP, or the country’s debt compared against its gross domestic product, is higher than the 60.9 percent debt-to-GDP recorded in the second quarter of 2024 and last year’s 60.2 percent. This is also above the government’s full-year debt-to- GDP target of 60.6 percent, as set by the Cabinet-level Development Budget Coordination Committee (DBCC), and the internat iona l accepted t hreshold of 60 percent. (See: https://businessmirror.com.ph/2024/11/09/q3-debtto-gdp-ratio-of-61-3-above-target/). Cai U. Ordinario
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he National Economic and Development Authority (Neda) does not expect the ongoing “political noise” to throw a monkey wrench into the country’s economic performance. In a briefing in Malacañang on Thursday, Socioeconomic Planning Secretary Arsenio M. Balisacan noted that for the past 12 years, the country’s economic performance was not affected by political noise. Balisacan reiterated that despite the feud between the President and Vice President, the economic team has adopted a “businessas-usual” approach and continues to focus on attaining the country’s economic and fiscal goals and targets. “As also seen in the recent economic history is that for so long as the government stays on course, it stays within its development and economic priorities and programs, there are no deviations from these programs—the business community will continue to maintain their confidence in the economy,” Balisacan said. See “Economy,” A2
STRENGTHENING OVERSEAS LABOR PARTNERSHIPS Department of Migrant Workers (DMW) Secretary Hans Leo J. Cacdac delivers a keynote message during the Overseas Labor Market Forum at Crowne Plaza Manila Galleria in Ortigas Center on Thursday, November 28, 2024. Joined by representatives from various embassies, the forum highlighted efforts to strengthen global labor partnerships and improve opportunities for overseas Filipino workers (OFWs) as the government continues to address evolving trends in the international labor market. NONOY LACZA
MORE PINOYS WILL HAVE BANK ACCOUNTS BY 2028–REPORT By Andrea E. San Juan @andreasanjuan
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ome 21 million unbanked Filipinos will have bank accounts by 2028, a development that will allow the Philippines to join the list of the most financially inclusive countries in the world, according to a report. The report titled “RealTime Payments: Economic Impact and Financial Inclusion,” was published by ACI Worldwide an innovator in global payments technology, in partnership with The Cen-
tre for Economics and Business Research (Cebr). According to the report, the Philippines will join the list of top 10 countries for “financial inclusion uplift” resulting from the adoption of real-time payments. Topping the list is Pakistan as it is projected to have 63.5 million newly banked citizens by 2028. This was followed by India with 25.5 million newly banked citizens; Philippines, 20.9 million; Nigeria, 13.8 million ; China, 13.8 million; See “More,” A2
Trump second term unlikely to benefit Asean–analysts
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he second term of US President-elect Donald Trump is unlikely to benefit Asean as the geopolitical context has changed much since then, according to United Kingdom-based think tank Oxford Economics. “Trump’s second presidency, unlike his first, is unlikely to benefit Asean. Together with our forecast of a slight uptick in global growth next year, Asian goods exports growth wouldn’t be spectacular in 2025,” Oxford Economics said in an e-mail on Thursday. “There are few tailwinds elsewhere. Asean economies, which had benefitted significantly from Trump’s first term, are unlikely to see a repeat during his second
term as the geopolitical context has changed much since then,” it added. Ateneo De Manila University Economist Leonardo Lanzona agrees with the UK-based think tank. He told the BusinessMirror that the issue on Trump slapping new tariffs can hamper the economic activities of most Asean nations, which he said is more likely to happen in this administration. “The issue is the increased tariffs that can hamper the economic activities of most Asean nations. In the first Trump administration, this was already being planned but was somewhat mitigated by the advisers who surrounded Trump at the time. See “Trump,” A2
PESO exchange rates n US 58.8290 n japan 0.3893 n UK 74.6011 n HK 7.5600 n CHINA 8.1177 n singapore 43.8957 n australia 38.2094 n EU 62.1705 n KOREA 0.0424 n SAUDI arabia 15.6669 Source: BSP (November 28, 2024)