How Will Our Next President Address the Philippines' New Record-High P12.68 Trillion Debt?

The Philippines' next president is going to have a lot of their plate in terms of our outstanding debt obligations. A lot.

In March, the national government's outstanding debt swelled to P12.68 trillion. Our domestic debt market accounts for a chunk of it at about 70 percent. The month saw the Philippines' debt jump 4.8 percent from P12.09 trillion in February. In a report released by the Bureau of Treasury this May, the debt was said to be attributed to the P457.8 billion raised from five-year retail treasury bonds, which should be the current administration's last RTB issuance.

Earlier, forecasts showed that the country was ripe for gross domestic product (GDP) growth of 7 to 9 percent. Debt-to-GDP ratio was expected to rise to 60.9 percent, as well, after a 16-year-record-high of 60.5 percent. Credit agencies in emerging markets like ours consider a 60-percent-of-GDP level manageable.

Moving forward, economic officials and analysts view fiscal consolidation with provisions for new or higher taxes as one way to address this. It should also include budget and spending cuts on certain non-priority sectors and more economic drivers.

The country's next set of presidential candidates have previously stated some of the ways government can address this, too.

Vice President Leonor "Leni" Robredo, for instance, has gone on record to say that if she was to become president, she'll closely look into how they're spent.

"We will make sure that we will pay the debts. We will make sure that they will go where they’re supposed to because the people will really lose if they just pay for the debts without getting any benefit from them,” Robredo said at the “Presidential Debate” hosted by CNN Philippines last February.

Former Sen. Ferdinand "Bongbong" Marcos Jr. has said in the past that he hopes to create "value for our economy" or debt servicing. He shares the same sentiments with Robredo, where our checks and balances should have to have safeguards to ensure proper allocation of borrowed funds.

Sen. Panfilo "Ping" Lacson, who happens to be a budget reform advocate, likewise, explained that a balanced budget should be prioritized.

"That’s because the budget should be balanced. The non-essentials should not be given a budget because, according to a study done by former Deputy Ombudsman Cyril Ramos, the amount that the national budget every year is P700 billion,” he said. “And then there’s our unutilized [funds]. I always study the national budget. So for the past 10 years, as I said earlier, its P328 billion on average from 2010 to 2020. So we need to have judicious spending."

Meanwhile, in a separate forum, Manila City Mayor Francsico "Isko Moreno" Domagoso said that he plans to unveil his 10-point Economic Agenda should he become president.

“The thing is we must continue to pursue, kailangan nating talaga na hikayatin natin ang ating mga kababayan na patuloy na mangarap at magkaroon ng pag-asa na itong mga pangarap na ito ay mangyayari sa isang mainam, masinop, at episyenteng pamamahala, na siya rin namang ginawa natin sa Lungsod ng Maynila,” claimed Moreno at the Kapisanan ng mga Brodkaster ng Pilipinas Presidential Candidates Forum.

Sen. Emmanuel "Manny" Pacquiao, on the other hand, wants to focus on building a self-sufficient, foreign debt-free government.

He explained his plans in the “Presidential Job Interview” aired over radio station dzRH last February. “My focus is for us not to borrow any more money. We have to stand on our own and strengthen our revenue income of our government so that we will no longer borrow money from international financial institutions every year,” he told the panel.

For Labor Leader Leody De Guzman, he hopes to do an audit on our national debt and probe possible corruption.

“Inutang ito [at the time P11.7 trillion] ng mga trapo ng mga dinastiya nakaupo sa gobyerno kaya karamihan ng mga inutang na ito ay ninakaw,” De Guzman said at the CNN debates. “Ito’y masamang utang. Kasi ito’y inutang mula kay Marcos ng mga daang administrasyon...kaya ang dapat gawin natin ay i-audit natin ito at ang pagabayaran natin kung sino nagnakaw dito."