Each Pinoy owes P59,121 by December 2014 - lawmaker

MANILA, Philippines - Each of the 100 million Filipinos will have a nominal debt per capita of P59,121 by yearend, according to estimates from the Department of Budget of Management (DBM) cited by a lawmaker.

Kabataan Party-list Representative Terry Ridon said by December 2014, each Filipino will owe an estimated P40,132 domestic debt and P18,989 foreign debt, for a total of P59,121 outstanding debt per capita.

He said the figures are based on the estimated P5.9-trillion outstanding debt of the national government by yearend 2014 reported by the Bureau of Treasury in the 2015 Budget of Expenditures and Sources of Financing (BESF).

Ridon believes that the large debt per capita figure is the result of the government’s "continued reliance" on debt to fund "ambitious" national budgets every year.

"Without addressing the wobbly and highly speculative nature of the nation’s economy, the government has once again targeted a larger budget for 2015, which – as expected – would be largely funded by more loans," Ridon said.

The Aquino administration has proposed a P2.6-trillion national budget for 2015, which is 15.1-percent higher than the current P2.26-trillion budget.

To fund the 2015 budget, the Department of Budget and Management (DBM) targets P2.337 in tax collections, non-tax revenues and privatization next year.

The government plans to borrow P700.8 billion to plug the budget deficit. Of the figure, only P283.7 billion will be used to plug the projected fiscal deficit, and P26.7 billion will be set aside for the government's cash buffer account.

The larger portion of the target new borrowings, amounting to P390.4 billion, would be used to pay for the amortization of the principal of the outstanding national government debt.

Ridon said  the government's targeted borrowing highlights the debt-driven nature of the country's fiscal program.

"Sa madaling salita, sa susunod na taon, mangungutang na naman ang gobyerno ng bilyones at ang malaking bahagi ng uutangin ay ipambabayad din sa utang. Noong nagdaang mga araw, walang bukambibig ang administrasyong Aquino kundi paggamit sa 'savings.' Pero kung totoong may 'savings,' bakit patuloy pa rin tayong umuutang?" Ridon asked.

Ridon also claimed that based on the 2015 BESF, the national government is targeting higher added borrowings for next year.

The government targets to incur an additional P902.6-billion domestic debt for next year, mainly through treasury bills and fixed rate treasury bonds.

It also seeks to incur an additional P145.723 billion foreign debt, mainly through loans from international funding institutions including the World Bank, the Asian Development Bank, and the Japan International Cooperation Agency.

Since the government will incur a total P1.048 trillion additional domestic and external loans next year, the total outstanding national debt would then increase to P6.47 trillion, Ridon said.

He claims that this translates to a higher projected nominal debt of P62,856 for every Filipino next year, using the estimated 102.965 million population projection of the National Statistical Coordination Board for 2015.

"Ibig sabihin nito, kahit 'yung mga Pinoy na hindi pa pinapanganak ngayon, may utang na agad na halos P63,000 pagdating ng 2015," Ridon said. -Louis Bacani