An economist said the 5.45-percent debt-to-gross domestic product (GDP) ratio registered by the government in 2020, despite being a 14-year high, is nothing to be alarmed about.

In a report, Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said government debt-to-GDP ratio of 54.5 percent last year remains below the international acceptance threshold of 60 percent of domestic output.

The debt-to-GDP ratio was 39.6 percent in end-2019.

“The Philippine national government debt-to-GDP ratio is expected to hover/move towards the 60 percent threshold from 2021-2022, after the 14-year high of 54.5 percent of GDP in end-2020, but still better/lower compared to other Asean/Asian countries,” Ricafort said.

The current ratio, he said, gives the government “greater leeway to increase spending, budget deficits, and increase the overall debt stock.”

Data released by the Bureau of the Treasury (BTr) Tuesday showed that the government’s outstanding debt as of end-2020 amounted to P9.795 trillion, higher than the P7.73 trillion in end-2019.

The bulk of the liabilities was accounted for by domestic borrowings at P6.694 trillion, while the balance of P3.1 trillion was accounted for by foreign currency-denominated loans.

The BTr attributed the rise in the government’s outstanding debt to higher requirements for programs related to programs to address the impact of the coronavirus disease (Covid-19) pandemic.

Citing economic managers’ target, Ricafort said the government’s debt-to-GDP ratio target for this year is 58.1 percent or total outstanding liabilities of around P11.982 trillion, while it is targeted to rise further to 59.9 percent in 2022 with the liabilities seen to increase to P13.6 trillion.

The government’s borrowing plan this year amounts to P3.025 trillion, while it is P2.32 trillion next year.