The Philippines needs to bring down its debt after pandemic spending and higher infrastructure outlays pushed government borrowings back to around 60 percent of the economy, according to a new book published by the Bangko Sentral ng Pilipinas (BSP). Philstar Biz reported the central bank’s call for rebuilding fiscal buffers.
The BSP publication emphasized that maintaining a sustainable debt level is crucial for the country's economic stability and future growth. It noted that the elevated debt ratio limits the government's ability to respond to future shocks, such as natural disasters or global economic downturns.
Central bank officials have previously warned that without fiscal consolidation, the Philippines risks higher borrowing costs and reduced investor confidence. The book recommends a combination of revenue measures and spending efficiency to gradually lower the debt-to-GDP ratio.