Borrowing the funds Spending the funds Raising revenue for payment Actual debt payment

Philippine Debt

Sources

Categories

Maturity

Domestic

Foreign

Direct Borrowings

Guaranteed and NonGuaranteed

Short term

Medium term

Long Term

Domestic Debt This is a fund borrowed by the government from various sources within the country.
External Debt External debt is a portion of the total debt of a country that is borrowed from creditors outside the country. These creditors may include foreign banks, private corporations or individuals. These loans are to be paid in the currency in which the loan was made thus; the country may export goods to the lending country.

The Bangko Sentral ng Pilipinas (BSP) is the financial institution that regulates and approves the amount of external debt the Philippines. It also controls and makes sure that there is enough money to be paid and there is sustainability in the countrys external debt.

The World Bank is a financial institution that aids third-world countries in their development by lending them money. Its main goal is to lessen poverty in the whole world.

The Philippines does not only borrow from financial institutions but also to foreign countries with high supply of money. Some of these countries are the United States of America, Japan, United Kingdom, France, and Germany.

Ferdinand Marcos (Dec 1965 - Feb 1986) During the years 1966 to 1969, Marcos borrowed a great amount of money to finance his domestic expansion and reforms. During the early 1970s, the government aimed at reviving growth and established an economic stabilization plan and a standby credit arrangement with the IMF In September 21, 1972, Marcos declared martial law, and in 1973, the current account was improved as the countrys GNP The end of 1970s was of high levels of foreign debt and external debt from the public sector. In 1981, credit grew and in 1982, the Philippines turned to the IMF once again During 1983, the debt-to-GDP ratio grew to 56% (compared to 35% during 1980) as well as the debt service ratio with 38% (versus 21% during 1980).

When Corazon Aquino won the February 1986 presidential elections. External debt increased to some $ 28 billion Through the IMF and commercial banks agreements, the Philippines was allowed to enter the Brady Plan, which allowed the government to use funds to repurchase $ 1.31 billion at a 50% discount, to reschedule of its debt due (from 1990 to 1994) and for 80 banks to subscribe to $ 700 million worth of new loans. A multination initiative (19891991) called Philippine Assistance Plan (or Multi Aid Initiative) agreed to provide a total of $ 6.7 billion assistance to the country.

The 12th president of the Philippines, President Fidel Ramos was able to uplift the economy of the country through focusing on people empowerment and global competitiveness. During his time, the Philippines was considered as one of the Tiger Cub Economies in Asia with its continuous growth and prosperity. The Republic Act 7653, more commonly known as the New Central Bank Act was enacted on June 14, 1993. With the reestablishment of the access to debt market, issuance of government bonds in foreign currencies was able to finance the recovery of the country,[15] until the Asian financial crisis of 1997.

The country borrowed from banks and financing institutions in national and international levels, which in turn caused the Philippines to be more in debt. At the end of 2000, total external debt had decreased from US$52.2 billion to US$52.1 billion.

During Arroyo administration, foreign debt of the country had reached its peak in 2003 with an outstanding of US$ 57.6 billion From 39% in 2001 to 68% in 2004 of national budget had been allotted to interest and principal payments of debt Until the last year of Arroyo administration, the external debt of the country was an outstanding US$ 54.9 billion in 2009.

It is the process of establishing and executing a strategy for managing governments debt in order to:
Raise the required amount of funding Achieve its risk and cost objectives Meet any other sovereign debt

management goals the government may have set

1. Positive Management -Debt management policy creates stabilizing or destabilizing effect 2. Neutral Management -Does not promote stabilization through debt management 3. Negative Management -Minimizing interest cost on national debt

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