There is nothing wrong with government borrowings so long as the funds are earmarked for “productive use,” Budget Secretary Amenah Pangandaman said.

In a vlog uploaded on the official YouTube account of Senator Francis Tolentino over the weekend, Pangandaman said the government was forced to borrow at the height of the pandemic because of meager revenues.

“Noong nagkaroon po ng pandemic, nagkaroon po tayo ng malaking utang para po mapondohan ‘yung sa health sector natin. So, tumaas po ‘yung debt-to-GDP (gross domestic product) natin (At the height of pandemic, we had a huge debt to finance our health sector. So, our debt-to-GDP increased),” Pangandaman said.

“Sinusubukan po nating ibaba ang ating utang as a percent of GDP at ang ating deficit. Ang deficit po, kulang po ‘yung revenue mo so ‘yung balanse po, uutangin mo iyan. So lahat po ‘yun (We are trying to lower our debt as a percentage of GDP and our deficit. There is a deficit because you have insufficient revenue and the balance will come from borrowings. So, it’s all) interconnected,” she added.

Given the limited fiscal space, the government has no choice but to borrow money and make sure that the move will increase potential returns, Pangandaman said.

Pangandaman also stressed that under the Marcos administration’s 2022-2028 Medium-Term Fiscal Framework (MTFF), the government aims to lower its debt-to-GDP and deficit-to-GDP.

Bringing down the national government’s debt-to-GDP ratio to less than 60 percent by 2025 and reducing the deficit-to-GDP ratio to 3 percent by 2028 are among the MTFF’s targets.

During the SMNI News’ “Dito sa Bayan ni Juan” program on Saturday, Chief Presidential Legal Counsel Juan Ponce Enrile said all governments, including the United States, China, and the European Union, have budget deficits.

Enrile also stressed that unlike other countries, the Philippines is trying to address government deficit.

“Wala akong alam na gobyerno na, kahit na ang Amerika, na walang utang. Panay deficit lahat iyan (There is no government, not even America, that is debt-free. They all have deficits),” he said.

“Kung ang gagastusin mo lang ay kung ano ang kita mo sa isang taon, talagang maiiwanan ka ng ibang bansa. Magiging alila ka. Alila ka ng Tsina, alila ka ng Amerika, alila ka ng European Union, ng lahat (If all you spend is what you earn in a year, you will really lag behind other countries. You will be a slave. You will be a slave of China, America, European Union, and of everyone).”

Pangandaman said the government would make sure that the projects that would be implemented are consistent with the Philippine Development Plan 2023-2028 and eight-point socioeconomic agenda “dahil baka masayang lang po ang pondo (because the funds might just go to waste).”

The national government outstanding debt reached PHP14.15 billion, as of end-June 2023, according to a data from the Bureau of Treasury (BTr).

The BTr also reported that the national government’s budget deficit stood at PHP225.4 billion for June, 4.58 percent or PHP9.9 billion above the previous year’s level. (PNA)