BSP Governor says not to worry over elevated debt-to-GDP ratio

ABS-CBN News

<p>MANILA - The Philippines&#x27; over 60 percent debt-to-GDP (gross domestic product) ratio for 2021 is not a cause for concern, Bangko Sentral ng Pilipinas Governor Benjamin Diokno said Tuesday.</p><p>The country&#x27;s debt-to-GDP ratio was at 40 percent before the COVID-19 pandemic but it has ballooned over the past 2 years as the country borrowed about $10 billion to fund its pandemic war chest, Diokno told ANC.</p><p>But most of the country&#x27;s pandemic loans have long and medium-term repayment schemes with low interest rates, Diokno said. </p><p>&quot;I don’t think we should worry about that. I know we have borrowed something like $10 billion because of the pandemic,&quot; Diokno said.</p><p>&quot;We have seen a much higher debt-to-GDP ratio in the past, because of our fiscal discipline, we were able to cut it to around less than 40 percent...Let’s not worry about it,&quot; he added.</p><p>Economic growth, seen to reach between to 7 to 9 percent in 2022, can &quot;easily&quot; outgrow the debt growth which is estimated to move up by just 3 to 4 percent this year, he said.</p><p>Diokno further allayed fears of rising debt by saying other countries even have a 200 percent debt-to-GDP ratio.</p><p>Meanwhile, the country&#x27;s bad loans are still below expectation which settled at 4 percent. Diokno said the earlier estimate is that non-performing loans could hit 6 percent during the pandemic.</p><p>Banks also have a fallback under the FIST (Financial Institutions Strategic Transfer) law where they can offload bad loans.</p><p>Lending grew for the 6th consecutive month to 8.5 percent in January 2022, central bank data showed. </p><p>Diokno said bank lending is likely to improve as the economy reopens further under the Alert Level 1.</p><p>Metro Manila and 38 other areas shifted to Alert Level on March 1 as the daily COVID-19 tally fell below 1,000.</p><ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/business/02/28/22/bank-lending-expands-85-pct-in-january-bsp">Bank lending expands anew by 8.5 percent in January: BSP</a></li>	<li><a href="https://news.abs-cbn.com/news/02/27/22/ncr-38-other-areas-to-shift-to-alert-level-1-in-march">Metro Manila, 38 other areas to shift to Alert Level 1 starting March 1 - Palace</a></li>	<li><a href="https://news.abs-cbn.com/spotlight/multimedia/infographic/03/01/22/new-guidelines-under-alert-level-1">New guidelines under Alert Level 1</a></li></ul><div><strong>RELATED VIDEO: </strong></div><figure class="op-interactive"><iframe allow="autoplay; fullscreen" frameBorder="0" height="100%" id="ivsplayer01" scrolling="no" src="https://player.ivideosmart.com/ivsplayer/v4/dist/html/iframe-src.html?iframeid=ivsplayer01&amp;key=e8c22c015ca9eafa76f1e3edfa03c603&amp;spid=3001339&amp;vid=1708344" width="100%"></iframe></figure><div class="iwantbar">Watch more in <a href="//www.iwantv.com.ph/">iWantv</a> or <a href="//tfc.tv/">TFC.tv</a></div>

The Philippines' over 60 percent debt-to-GDP ratio for 2021 is not a cause for concern, Bangko Sentral ng Pilipinas Governor Benjamin Diokno said Tuesday.

BSP Governor says not to worry over elevated debt-to-GDP ratio | ABS-CBN

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BSP Governor says not to worry over elevated debt-to-GDP ratio

BSP Governor says not to worry over elevated debt-to-GDP ratio

ABS-CBN News

Published Mar 01, 2022 12:32 PM PHT

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Updated Mar 01, 2022 12:51 PM PHT

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BSP

debt-to-GDP ratio

economy

lending

bad loans

NPL

debt repayment

pandemic

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