Nearly a third of Philippines’ P5.3 trillion budget used to pay for debts

Despite the huge repayment, the government’s outstanding debt will still jump to a new high of P14.63 trillion by end 2023.

Ben O. de Vera, Jeannette I. Andrade

Ben O. de Vera, Jeannette I. Andrade

Philippine Daily Inquirer


President Ferdinand Marcos Jr.

August 23, 2022

MANILA — The House of Representatives on Monday received the P5.268-trillion proposed budget of the Marcos administration for 2023, nearly a third of which will be used to repay the government’s debt swollen by massive loans used to address the COVID-19 pandemic.

During the turnover by Budget Secretary Amenah Pangandaman of the 2023 national expenditure program, Speaker Martin Romualdez assured the public that the lower chamber would act with dispatch in crafting the 2023 general appropriations bill and conclude committee and plenary deliberations before Oct. 1, when Congress goes into recess. Committee-level deliberations are set to start on Aug. 26.

According to Romualdez, they would make sure that “every centavo of the national budget will be spent wisely to implement programs that would save lives, protect communities and make our economy strong and more agile.”

He said the House would perform its constitutional mandate to “scrutinize and act deliberately and judiciously and very, very cautiously in the deliberations of the national budget,” saying that the 2023 general appropriations bill would be the most important piece of legislation this year.

The speaker added: “The budget (process) of 2023 will be transparent. This will be a product of the entire House of Representatives where the majority will listen to the minority bloc’s concerns and of course, we as the representatives of the people will also be attuned to their needs.”

Debt servicing
A big chunk of the proposed budget will be eaten up by debt servicing as the government will repay a record P1.6 trillion in debts next year — the highest yearly debt servicing on record — or 29.8 percent of the proposed 2023 budget.

Next year’s debt servicing expenses will be bigger than the P1.26 trillion set aside to repay maturing obligations this year.

In 2023, the government will settle P1.35 trillion in domestic debts (up from P1.02 trillion this year), and P253.8 billion in foreign obligations (up from this year’s P240.1 billion).

Debt payments under next year’s national budget will include a record P1.02 trillion in principal amortization (up from P751.1 billion this year), on top of P582.3 billion in interest (up from this year’s P512.6 billion).

Despite the huge repayment, the national government’s outstanding debt will still jump to a new high of P14.63 trillion by the end of 2023, the Marcos administration’s first full year in office, budget documents showed.

‘Inclusive prosperity’
“The overall goal is to reinvigorate job creation and reduce poverty by steering the economy back to its high growth path in the near term and sustaining the high yet inclusive and resilient growth of 6.5 to 8 percent up to 2028. To reduce vulnerability and remedy the scars from the pandemic, we will continue to implement risk-managed interventions to fully reopen the economy and ensure the unimpeded and adequate delivery of social services such as health, education and social protection,” President Ferdinand Marcos Jr. said as he urged Congress to pass the proposed 2023 budget.

Pangandaman noted that the proposed 2023 national budget, higher by 4.9 percent than the 2022 budget, was crafted with the theme “Agenda for Prosperity: Economic Transformation Towards Inclusivity and Sustainability.”

Pangandaman pointed out that while it was the government’s responsibility to ensure that no citizen was left behind, “the harsh truth is many Filipinos suffer because of soaring oil and food prices, insufficient health facilities, and expensive commodities” as well as the effects of the pandemic.

“It’s against this backdrop that we created the (2023 budget). At the heart of the proposed national budget is inclusive and sustainable prosperity,” she said, adding that government spending would be anchored on strengthening the purchasing power of Filipinos; reducing vulnerability and mitigating scarring from the COVID-19 pandemic; ensuring sound macroeconomic fundamentals, and supporting local governments.”

Infra push
Under the proposed budget, the allocation for the Department of Education (DepEd) of P852.8 billion was crafted with the hope of resuming in-person classes.

ACT Teachers Rep. France Castro still described as “measly” the budget set aside for DepEd, noting that at least P1.3 trillion should be allocated to the department.

Castro, in a statement, said that education, “especially ones that hone critical and analytical thinking,” was not prioritized with the slashing by P2.5 billion and P893 million of the budgets of the University of the Philippines system and UP-Philippine General Hospital, respectively.

The agriculture sector will get P184.1 billion, P30.5 billion of which will be set aside for the national rice program to “help maintain the price of rice at affordable levels and for the production of other vital agricultural commodities.”

Agricultural productivity will be complemented with funds for the construction and rehabilitation of farm-to-market roads, improvement of irrigation networks and provision of subsidies and credit access to farmers and fisherfolk.

Shovel-ready infrastructure programs under the “Build Better More” program will receive P1.2 trillion “to propel growth in agriculture, trade and tourism sectors and eventually reduce transport and logistics costs.”

Among the departments, public works and highways will receive P718.4 billion; health, P296.3 billion; social welfare and development, P197 billion; energy, P476 billion; and transportation, P167.1 billion.

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