NG debt will rise to P17.35-T in 2025

The outstanding debt of the NATIONAL GOVERNMENT (NG) is expected to reach a record P17.35 trillion by the end of 2025, according to the Department of Budget and Management (DBM).

The budget for expenditure and financing sources for 2025 shows that the NG’s debt burden is expected to increase. increase by 8.08% from the projected debt of P16.06 trillion at end-2024.

The bulk will come from outstanding domestic debt, which is expected to rise by 9.64% to €11.98 trillion at the end of 2025, from €10.92 trillion at the end of 2025.

Outstanding foreign debt is also expected to rise 4.76% to P5.38 trillion at end-2025 from P5.13 trillion at end-2024.

Deputy Budget Secretary Joselito R. Basilio said the debt reflects the massive borrowing the government incurred during the coronavirus pandemic, meaning debt is likely to peak in the coming years.

However, he said the government is a Fiscal consolidation plan and could pay down debt as the economy continues to grow.

For 2025, the NG has set its borrowing program at P2.55 trillion, down 0.97% from P2.57 trillion this year.

National Treasurer Sharon P. Almanza said next year’s gross loans will be lower as fewer credits are expectedFfinancing requirements.

“The decline is underwayFfinancing requirement. RegardingFBoth external and domestic financing requirements are lower,” she shared Business in a Viber message.

Broken down, 80% of the loans will come from domestic sources, while the remaining 20% ​​will come from foreign sources.

Gross domestic borrowings for 2025 were pegged at P2.04 trillion, up 5.91% from the 2024 P1.92 trillion program.

On the other hand, gross external borrowings for next year were pegged at P507.41 billion, down 21.46% from P646.08 billion this year.

“[Some] For example, program loans and other project loans will decrease by 2025 because many of our projects or programs have already received a loan for 2024,” said Mr. Basilio.

Gross domestic borrowings will be $1.98 trillion FFixed-rate government bonds and P60 billion in treasury bills.

On the other hand, gross external debt will include P236.11 billion in program loans, P73.55 billion in project loans and P197.75 billion in bonds and other inflows.

The NG borrows from foreign and domestic lenders to finance its budget deficit as it spends more than its revenues.

“Outstanding NG debt levels in pesos could continue to post new record highs amid persistent fiscal deficits that would be financed by additional NG borrowings,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said. in a Viber message.

He noted that a compensating factor could be the growth of the country’s gross domestic product (GDP).

The government is targeting GDP growth of 6.5 to 7.5% next year.

“Relatively faster GDP growth could help keep the public debt-to-GDP ratio below the international threshold of 60%, thereby maintaining the country’s favorable credit rating,” he added.

Public debt as a percentage of GDP stood at 60.2% at the end of the first quarter. The government is targeting a debt-to-GDP ratio of 60.3% by the end of the year, slightly above the 60% threshold considered achievable for developing economies.

Mr Ricafort said the government should intensify tax collection, impose new or higher taxes and ensure that efficious spending to reduce the budgetFicit and further reduce the debt ratio.

Meanwhile, the government has set its debt service program at P2.05 trillion next year, up 1.19% from P2.03 trillion this year.

Domestic debt payments are programmed at P1.61 trillion, while external debt payments are at P436.78 billion.

TAX INCOME
For 2025, the NG targets a revenue of P4.64 trillion, 8.77% higher than this year’s projected revenue of P4.27 trillion.

The government expects to collect P4.33 trillion in tax revenue in 2025, down 13.41% from this year’s projection of P3.82 trillion.

The Bureau of Internal Revenue is expected to collect P3.23 trillion, while the Bureau of Customs is expected to generate P1.06 trillion.

On the other hand, non-tax revenues are expected to decline 48.27% to P210.79 billion next year from P407.49 billion this year.

The targeted revenues from privatization have more than doubled from EUR 42.12 billion this year to EUR 101.02 billion in 2025.

Next year’s budget also includes a P13 billion contingent fund, which includes safeguards to prevent its misuse, Ms. Pangandaman said.

“The fund can only be used for specific urgent needs, such as legal obligations of the government with final decisions of authorities, needs of newly created agencies, and the fund cannot be used for confidential and intelligence funds for non-security agencies unless the President confirms its necessity, and purchasing or improving vehicles.” — BMDcruz