MANILA, Aug. 25 (Xinhua) -- The Philippines will use over 11 percent of the proposed national budget for 2023 to repay its debts, the Department of Finance said on Thursday.
Philippine Finance Secretary Benjamin Diokno said 11.6 percent of the budget, or roughly 10.9 billion U.S. dollars, is allocated for debt relief, including 10.4 billion dollars for interest payments and roughly 500 million dollars for net lending.
Diokno said that the national debt remains "within manageable levels," adding that most of the national debt "is long-term, spread out, and set at the lowest possible rate."
As of end-June, the Southeast Asian country's national government debt stood at 228.39 billion dollars, equivalent to 62.1 percent of its gross domestic product (GDP).
The government aims to reduce the debt-to-GDP ratio to less than 60 percent by 2025 and cut the deficit-to-GDP ratio from the current 6.5 percent to 3.0 percent by 2028.
Diokno said that the structural reforms and enhanced tax system instituted by the previous administration ensure that the government can meet its obligations.
He expressed confidence that government revenues will continue to pick up, and the deficit will decrease on the back of a strong economy, as demonstrated by a broad-based 7.4 percent GDP growth rate in the second quarter of 2022.
In July, days after Philippine President Ferdinand Romualdez Marcos took office, the new administration lowered its GDP target band for this year to 6.5 percent to 7.5 percent from 7 percent to 8 percent due to "recent external and domestic developments."
The Manila-based Asian Development Bank forecasts a 6.5 percent GDP growth in 2022 and 6.3 percent in 2023 for the Philippines. ■
