Connect with us

Hi, what are you looking for?

Economy

Return to pre-pandemic debt could pose growth risk

DETERIORATING public finances across Asia will be difficult to reverse, with any attempts to return to pre-pandemic debt ratios posing a risk to growth, ANZ Research said.

“Governments can afford to maintain expansionary fiscal policies and some are doing so,” ANZ Research analysts said in a note.

“We further estimate that restoring public debt ratios to pre-pandemic levels is an exceptionally tall order. It will require governments to run primary surpluses on a scale that will severely hurt growth,” according to Sanjay Mathur, ANZ research chief economist for Southeast Asia and India, and economist Krystal Tan.

The Philippines’ fiscal position will likely continue to weaken in 2021, though its larger budget deficits and debt levels are unlikely to harm macroeconomic stability, they said.

“Based on this fiscal stance, the public debt ratios (in Asia are) likely to continue to rise in 2021. In Malaysia, the debt ratio will remain above 60% of GDP (gross domestic product) and in the Philippines, it will exceed its 50% threshold,” Mr. Mathur and Ms. Tan said.

The government expects the Philippine debt-to-GDP ratio to hit 53.9% and 58.3% this year and in 2021. These are still below the threshold of 70% deemed safe by the International Monetary Fund but are much higher than the record low of 39.6% in 2019.

The budget deficit is expected to grow to P1.815 trillion this year, equivalent to 9.6% of GDP, before receding to P1.749 trillion or 8.5% of GDP next year. The budget deficit in 2019 was P660.2 billion or 3.4% of GDP. — Luz Wendy T. Noble

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Economy

By Diego Gabriel C. Robles THE Philippine economy expanded by 7.4% in the second quarter — slower than expected — as rising inflation weighed...

Economy

By Abigail Marie P. Yraola, Researcher THE Philippines’ merchandise trade deficit hit another record in June as imports continued to outpace exports despite a...

Economy

THE National Government’s (NG) outstanding debt as a share of the gross domestic product (GDP) eased to 62.1% at the end of June. Data...

Economy

By Keisha B. Ta-asan SOURED LOANS held by Philippine banks fell for a fourth straight month in June, bringing the nonperforming loan (NPL) ratio...

Economy

Smart says third telco player’s PCC complaint meant to avoid liability By Arjay L. Balinbin, Senior Reporter GLOBE Telecom, Inc. on Tuesday said it...

Economy

DMCI Holdings, Inc. reported on Tuesday that its second-quarter consolidated net income went up by 73% to P9.03 billion from P5.23 billion, driven by...

You May Also Like

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Economy

Ivermectin, an existing drug against parasites including head lice, has had a checkered history when it comes to treating COVID-19. The bulk of studies...

Investing

Insomnia is the most common sleep disorder in the global population. Therefore, it is a problem that many people suffer or have suffered throughout...

Investing

Instagram still holds the top spot for social media in terms of building brand reputation and expanding business potential. Every day, more and more...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.