By the end of 2024, each Filipino carries a debt burden of P141K.
Senate Minority Leader Koko Pimentel III expressed grave concerns regarding the rapid escalation of the country’s national debt, which is on track to reach an unprecedented P15.8 trillion by the end of the coming year, burdening every Filipino with a staggering debt load of P141,000.
“Ballooning na rin ‘yung principal at debt payments and, yet, ballooning pa rin ‘yung total amounts to be paid.”
“How come Filipinos should not worry about their ballooning debt? Ballooning na rin ‘yung principal at debt payments and, yet, ballooning pa rin ‘yung total amounts to be paid,” Pimentel said during the briefing of the Development Budget Coordination Committee on the proposed P5.768-trillion budget outlay for 2024.
The veteran legislator questioned the Marcos administration’s economic managers regarding debt servicing.
Specifically, the seasoned lawmaker called for a thorough dissection of the amounts involved.
For 2024, the government has set aside a staggering P1.9 trillion for debt principal and interest payments in 2024, with P1.2 trillion designated for the principal and approximately P670.5 billion for interest payments.
The seasoned lawmaker noted that the P1.9 trillion accounts for 32.94 percent of the budget for next year.
The nation’s total debt has reached a significant P14 trillion as of May 2023, with an average interest rate of around 5% as disclosed by the National Treasurer prompted by the senator’s probing.
According to economic managers, the country’s debt is equivalent to 61% of its gross domestic product or GDP.
While this debt-to-GDP ratio does not seem to alarm the economic managers, Pimentel said he was deeply concerned.
“Imagine yung households buried in debt,” Pimentel said. “Ganyan kadelikado ang ating sitwasyon.”
The current debt-to-GDP ratio stands at 61%, while that of its neighboring countries such as Malaysia and Thailand at 61.57% and Singapore at 167% of GDP, as mentioned by the National Treasurer.
“I take no consolation from the debt-to-GDP ratio,” he noted.
“The best proof that we are putting our debts to wise expenditures would be if we are able to bring down the absolute level of our debt,” Pimentel insisted, rather than seeking solace solely in the debt-to-GDP ratio.
“I hope the actual financial situation of the country will be explained to the people,” he added.
Meanwhile, Pimentel also scrutinized the unrealistic poverty threshold set by the National Economic and Development Authority (NEDA).
NEDA Secretary Artemio Balisacan said that the standard for a family of five is P12,000 per month, which means if a family of 5 is making less than P12,000, then they are living below the poverty threshold.
But for Pimentel, the NEDA’s standard is too low.
“The 12,000 standard is even below the current minimum wage,” Pimentel said as he reiterated his call for a higher minimum age.
“There must be some sense in fixing the minimum wage to live decently.”
“There must be some sense in fixing the minimum wage to live decently,” Pimentel stressed.
He called on economic managers to conduct a thorough review of the entire process to establish a more realistic poverty threshold and to accurately assess the poverty incidence rate.
“Because if our standards are not realistic, then we are led to believe in an imaginary world,” Pimentel concluded.
