Finance Secretary Benjamin Diokno said Tuesday 12.1 percent, or P699.2 billion of the proposed P5.768-trillion budget for fiscal year 2024 is allocated to financing the debt burden, including net lending.
“When assessing the debt burden component of the budget, it is crucial to solely consider interest payments and net lending,” Diokno said in a statement.
He said interest payments were declining, freeing up fiscal resources which could be reallocated to support the government’s priority programs. Data showed that from 1986 to 2015, the average share of interest payments to the total national government expenditures stood at 23.3 percent. This declined to an average of 10.1 percent from 2016 to 2022.
“For 2024, the allocation for interest payments is only 11.6 percent or P670.5 billion of the 2024 budget. This allows us to spend more on socioeconomic programs and projects in our priority sectors such as education and infrastructure,” Diokno said.
Diokno also said that under any accounting standard, the principal amortization of debt is not included in the expense item since it is not classified as expenditure, hence it is not automatically appropriated. “The settlement of debt obligations incurred from expenses were already recorded in the past. Therefore, principal amortization only represents the fulfillment of financial responsibilities arising from previously recorded expenses,” he said.