Impending El Niño brings a debt warning

THE issue of the government's debt load is a nagging topic that policymakers would rather avoid because it is an off-key note in the song they sing over and over again about the Philippines' attractive economy and growth prospects. Yes, the government's outstanding debt is a bit high, they acknowledge, but there's no cause for alarm despite how bad it looks that the debt-to-GDP ratio went from about 50 percent in 2019 to 63 percent currently.

After all, the economy is still growing at an impressive rate compared to the Philippines' peers, all of whom face the same challenging global economic conditions. And besides, they add confidently, if debt was such a problem, would the Philippines be able to maintain its "investment grade" credit rating (albeit just barely) or have enough money lying around to create a sovereign wealth fund or investment fund or slush fund, or whatever the hell the Maharlika fund thing is supposed to be? Furthermore, the government's increased debt has a clear external rather than systemic cause in the Covid-19 pandemic; since that is no longer happening, the government's sound fiscal management will easily bring debt back down to its previously safe level.