DOF rejects call for debt payment moratorium

Finance Secretary Carlos Dominguez III rejected a call for government to consider a moratorium on its debt payment to raise more funds to fight the COVID-19 pandemic, calling it ‘narrow-sighted’.

Senator Imee Marcos urged government to temporarily suspend its debt service payments and instead reallocate those funds to the country’s COVID-19 response.

Dominguez said the government has not and will not consider suggestions for the Philippines to request for a moratorium on debt servicing to its creditors and use such interest payments in the national budget to fund the COVID-19 social amelioration program.

“Debt moratorium has not crossed our mind. It was never entertained or will ever be a part of our crisis response measures,” Dominguez stressed.

“The strongest pillar of the Philippines’ standing in the global economic community is that the country honors its financial obligations — and, for that reason, investor confidence in our economy is broad and deep. Integral to our country’s remarkable turnaround story is how credible and responsible a borrower it has become since 1986.” he added.

Dominguez reported that the Philippines’ total debt-to-gross domestic product (GDP) ratio has gone down to 44.2% in 2019, from 78.3% in 1986 because of sound fiscal stewardship across administrations.

Actual debt-to-GDP ratio, which excludes guarantees, was also down to 41.5% in 2019.

He added that the Philippines had built a 34-year track record, beginning with the Corazon Aquino administration, of honoring its obligations.