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Economic team aims return of PH fiscal deficit to pre-pandemic levels: Diokno

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John Gabriel Agcaoili, ABS-CBN News

MANILA - The Philippine government&#x27;s economic team is aiming to reduce the country&#x27;s fiscal deficit and return it to pre-pandemic levels, Finance Secretary Benjamin Diokno said on Thursday. In an interview with ANC’s Business Outlook, Diokno said the COVID-19 crisis worsened the Philippines&#x27; budget deficit, which he said was at 3 percent before the pandemic.&quot;We want to go back to where it was before, 3 percent,&quot; he said.Diokno also said the economic team also seeks to temper the Philippines&#x27; debt-to-GDP ratio, which indicates a country&#x27;s sustainability to pay back its debts with its production. According to the finance chief, the Philippines&#x27; debt-to-GDP ratio before the pandemic was at 40 percent before it went up to 61 percent.&quot;We plan to reduce that to around 51 percent by the end of the president&#x27;s term,&quot; Diokno said.The economic team is following a &quot;medium-term fiscal framework&quot; which Diokno said is &quot;first-ever in the country.&quot;&quot;We&#x27;re shooting for a consolidation of the fiscal picture.&quot;Diokno said the Marcos Jr administration is also aiming to reduce the country&#x27;s poverty incidence to 9 percent. The Philippines&#x27; poverty incidence, which was at 17.8 percent in 2021, is expected to decline to 13.5 percent in 2023 and further down to 10.5 percent by 2025, World Bank data showed earlier.The Bureau of Treasury earlier said that the Philippines’ sovereign debt hit a record P14.1 trillion at the end of last May.The country’s debt grew by P185.4 billion or 1.3 percent from the previous month as the Philippines borrowed more, and as peso weakened against the US dollar. <ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/business/07/04/23/philippine-debt-hits-record-p141-trillion-in-may">Philippine debt hits record P14.1 trillion in May</a></li></ul>The Philippines&#x27; debt-to-GDP ratio ballooned to 63.5 percent last March from 60.4 percent in December 2022, government data also showed. The total is the highest since 2005 when the debt ratio reached 65.7 percent. It has been hovering below 40 percent before the COVID-19 pandemic.<ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/business/05/13/22/ph-debt-to-gdp-ratio-balloons-to-635-pct-in-march">Philippines&#x27; debt-to-GDP ratio balloons to 63.5 percent as of end March</a></li></ul>The Philippines’ sovereign debt ballooned during the pandemic as the administration of former President Rodrigo Duterte borrowed heavily to fund its COVID-19 response. Duterte’s ambitious infrastructure push also contributed to higher debt levels.Economic managers have said that the debt level remains manageable as economic growth can outpace the cost of servicing debt.

According to the finance chief, the Philippines' debt-to-GDP ratio before the pandemic was at 40 percent before it went up to 61 percent.

Economic team aims return of PH fiscal deficit to pre-pandemic levels: Diokno

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Economic team aims return of PH fiscal deficit to pre-pandemic levels: Diokno

John Gabriel Agcaoili,

ABS-CBN News

Published July 07, 2023 03:15 AM PHT

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Philippine debt-to-GDP ratio

Philippine fiscal deficit

Benjamin Diokno

Philippine economy

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