Philippine Debt FPVICLAR

7/27/2019 Philippine Debt FPVICLAR

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Borrowing the funds Spending the funds

Raising revenue for payment

Actual debt payment


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PhilippineDebt

Sources

Domestic Foreign

Categories

DirectBorrowings

Guaranteedand Non-

Guaranteed

Maturity

Short term

Mediumterm

Long Term


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Domestic Debt

This is a fund borrowed by the government

from various sources within the country.

External Debt

External debt is a portion of the total debtof a country that is borrowed from creditorsoutside the country. These creditors mayinclude foreign banks, private corporationsor individuals. These loans are to be paid inthe currency in which the loan was madethus; the country may export goods to thelending country.


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The Bangko Sentral ng Pilipinas (BSP) is

the financial institution that regulatesand approves the amount of external

debt the Philippines. It also controls andmakes sure that there is enough moneyto be paid and there is sustainability in

the countrys external debt.


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The World Bank is a financial institutionthat aids third-world countries in theirdevelopment by lending them money.

Its main goal is to lessen poverty in thewhole world.


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The Philippines does not only borrowfrom financial institutions but also toforeign countries with high supply of

money. Some of these countries are theUnited States of America, Japan, UnitedKingdom, France, and Germany.


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Ferdinand Marcos (Dec 1965 - Feb 1986)

During the years 1966 to 1969, Marcos borrowed a great amountof money to finance his domestic expansion and reforms.

During the early 1970s, the government aimed at reviving growthand established an economic stabilization plan and a standbycredit arrangement with the IMF

In September 21, 1972, Marcos declared martial law, and in1973, the current account was improved as the countrys GNP

The end of 1970s was of high levels of foreign debt and externaldebt from the public sector.

In 1981, credit grew and in 1982, the Philippines turned to the IMFonce again

During 1983, the debt-to-GDP ratio grew to 56% (compared to35% during 1980) as well as the debt service ratio with 38%(versus 21% during 1980).


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When Corazon Aquino won the February 1986

presidential elections. External debt increased tosome $ 28 billion

Through the IMF and commercial banks agreements,the Philippines was allowed to enter the Brady Plan,which allowed the government to use funds torepurchase $ 1.31 billion at a 50% discount, toreschedule of its debt due (from 1990 to 1994) and for

80 banks to subscribe to $ 700 million worth of newloans. A multination initiative (19891991) called Philippine

Assistance Plan (or Multi Aid Initiative) agreed toprovide a total of $ 6.7 billion assistance to thecountry.


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The 12th president of the Philippines, President Fidel Ramoswas able to uplift the economy of the country through

focusing on people empowerment and globalcompetitiveness. During his time, the Philippines was considered as one of

the Tiger Cub Economies in Asia with its continuousgrowth and prosperity.

The Republic Act 7653, more commonly known as the

New Central Bank Act was enacted on June 14, 1993. With the reestablishment of the access to debt market,

issuance of government bonds in foreign currencies wasable to finance the recovery of the country,[15] until theAsian financial crisis of 1997.


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The country borrowed from banks andfinancing institutions in national andinternational levels, which in turn causedthe Philippines to be more in debt.

At the end of 2000, total external debthad decreased from US$52.2 billion toUS$52.1 billion.


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During Arroyo administration, foreign debt of the

country had reached its peak in 2003 with anoutstanding of US$ 57.6 billion From 39% in 2001 to 68% in 2004 of national budget

had been allotted to interest and principal paymentsof debt

Until the last year of Arroyo administration, theexternal debt of the country was an outstanding US$54.9 billion in 2009.


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1. Positive Management

-Debt management policy creates stabilizingor destabilizing effect

2. Neutral Management-Does not promote stabilization through debt

management3. Negative Management-Minimizing interest cost on national debt


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Philippine Debt FPVICLAR

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