The general government (GG) debt stood at P4.5 trillion as of June 2014, equivalent to 37.3 percent of the gross domestic product (GDP), the Department of Finance said.
The GG debt viewed against GDP represents a 6-percentage-point drop in the ratio since 2009, when the ratio equaled 44.3 percent of GDP.
The GG debt, which includes the national government’s debt minus debts of local governments, intra-sector debt holdings and the bond sinking fund—from which maturing government debts are paid—is an important indicator of the government’s creditworthiness because the ratio in relation to GDP provides creditors an idea of the government’s ability to settle its obligations.
The broader national government debt stood at P5.7 trillion, slightly higher than the first-quarter of 2014 because of higher domestic debt net issuance and the impact of the peso’s depreciation against the US dollar.
Of the total national government debt, P1.919 trillion, or 34 percent, were obtained from foreign creditors while P3.731 trillion, or 66 percent, were borrowed from the domestic market.
Also contributing to the increase in the national government debt was the 0.5-percent increase in the debt obligations of local government units from its March 2014 level.
The intra-sector debt holdings of government securities held by Government Service Insurance System and the Social Security System, which are among those deducted from the national government debt figure to arrive at the GG debt, rose to P485.7 billion in June 2014 from P453.8 billion in June 2013.