During the House committee on appropriations briefing with the Cabinet-level Development Budget Coordination Committee for the P6.352 trillion National Expenditure Program, Finance Secretary Ralph Recto defended the government’s borrowing spree, amid estimates that the country’s outstanding debt could breach P20 trillion by the end of the Marcos administration.
“By 2028, the total debt will be roughly P20 trillion, but the total economy will be P37 trillion,” Recto said. “While our debt is growing, our economy is expanding as well and we are lessening poverty levels.”
The projected debt is expected to pick up by 9.8 percent to P16.06 trillion by the end of the year while the nominal gross domestic product is pegged at P26.5 trillion. The national debt stock as of end-June was at its highest level to date at P15.48 trillion.
Recto said that he expects the income of Filipinos to grow as the economy grows and we will be able to pay off our debts.
A debt of P20 trillion by the end of 2028 means that the Marcos Jr. administration will have added roughly P7.21 trillion in debt over six years.
“We are not borrowing just because of the infrastructure projects. But those are important so that we can create jobs, increase people’s income, and reduce poverty. That’s the end game,” Recto said.
He is also banking on better labor conditions and declining poverty incidence to boost the economy and eventually replace debts.
While debt is indeed necessary for any nation, especially if it is used and managed properly, the Filipino people, who have been traumatized with bad debt incurred in the past, particularly during the time of President Ferdinand Marcos Sr., can only hope that this time, the lessons have been learned, and the protections in place so that all the debt we are getting into this time will eventually pay off. For that to happen, corruption has to be addressed, as it remains one of the biggest leakages of national funds, which should be going to the welfare of the people, instead of secret and dummy bank accounts.
Hopefully this iteration of the Department of Finance will prove to be a responsible steward of the country’s coffers.*
