OPINION | The Philippines’ relationship with foreign debts By Andrew J. Masigan READ:
nance infrastructure and social development projects which can accelerate economic development and improve people’s lives. But it also comes with risks. Here are some of them:
In just two years, Marcos Sr. doubled the country’s foreign debt load to $8.2 billion while our GDP was only $22 billion in 1977. This elevated our foreign debt to GDP ratio to 37%. Mind you, this amount did not even include domestic debt. In the 1980s, the Philippines borrowed its way to repay its debts, thereby falling into a debt vortex. By the time the Marcoses were ousted in 1986, foreign debts ballooned to $26 billion, 43 times the amount in 1965. It was 50% of GDP.
Mind you, our $109-billion foreign debt is not all ascribed to the state. Only $67 billion or 61% of it is attributed to government while $42 billion, or 39%, is attributed to the private sector. Today, foreign debts are utilized to build the infrastructure needed to propel the economy forward. This includes new highways, bridges, seaports, and railway systems.
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