MikeLigalig.com

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#FactPH on sovereign debts, UTANG - a favorite topic of those with poor knowledge on how a country’s economy works but keep on babbling on social media. Hence, we #ExplainExplainExplain.

Lifted word per word from the public post of JAN Writer:

Public debt of selected major economies

Public debt, also known as sovereign debt, is debt a country owes to lenders outside of itself. They can include individuals, businesses, and even other government.[1]

Japan
GDP: $4.750 trilion
Public debt: 250% (approx. 2020)
Public debt per capita (2017): $91,768

Greece
GDP: $175 billion
Public debt: 192% (approx. 2020)
Public debt per capita (2017): $33,905

Italy
GDP: $2 trillion
Public debt: 157% (approx. 2020)
Public debt per capita (2017): $41,056

Portugal
GDP: $200 billion
Public debt: 132% (approx. 2020)
Public debt per capita (2017): $26,462

Singapore
GDP: $340 billion
Public debt: 120% (approx. 2020)
Public debt per capita (2017): $60,016

United States
GDP: $19 trillion
Public debt: 120% (approx. 2020)
Public debt per capita (2017): $46,645

Vietnam
GDP: $262 billion
Public debt: 62% (approx. 2020)
Public debt per capita (2017): $1,329

Malaysia
GDP: $333 billion
Public debt: 53% (approx. 2020)
Public debt per capita (2017): $5,313

Philippines
GDP: $360 billion
Public debt: 50% (approx. 2020)
Public debt per capita (2017): $1,182

Thailand
GDP: $528 billion
Public debt: 46% (approx. 2020)
Public debt per capita (2017): $2,781

Indonesia
GDP: $970 billion
Public debt: 36.5% (approx. 2020)
Public debt per capita (2017): $1,112

Facts:

- Almost all, if not all, countries in the world will have increased public debt by the end of 2020. That's just the hard fact about this pandemic. So, suck on that.

- The pandemic has brought the world economy to a standstill; therefore, it is an imperative for governments to borrow money (unless they have a huge amount of surplus) which will be used to subsidize businesses within their borders temporarily until they can resume their operations normally, and aid their citizens who are affected by the crisis. That's just the right thing to do.

Sa mga bobong katulad ni Ninotchka Rosca na nagkakalat ng alarmist narrative tungkol sa pangungutang ng gobyerno, magbasa naman kayo. Kung ayaw n'yong magbasa, huwag kayong magpaka-ekonomista. Hindi 'yan parang pangungutang sa bumbay tapos sisingilin ka sa katapusan na may 20% interest na.

There are methods and mechanisms that governments utilize to pay public debt, such as selling notes and bonds, adjusting the interest rate, austerity measures, raising taxes, among others.

So, is our current public debt something to worry about? Not really. Not as much as Japan should worry about its $12 trillion debt[5], or the United States over its record $22 trillion debt[6] compared to our roughly $183 billion[2].

Even Vietnam has more public debt than us in terms of debt-to-GDP ratio and their economy is smaller[2].

Ang ibig sabihin nito, kada Japanese, may utang na PhP4,515,490 at Php2,295,190 naman kada Kano. Bawat Vietnamese, may utang na PhP 65,387. Php 58,154 kada Pilipino. Converted ‘yan based on CIA data based on current exchange rates (July 28).

‘Di kayo ang sisingilin d’yan, mga inutil. Walang kakatok sa pinto n’yo para singilin kayo d’yan. Ang gobyerno ang magbabayad n’yan. TikTok lang kayo ng TikTok, mag-shopping sa SM at Lazada para may kitaing buwis ang gobyerno.

As long as our fiscal institutions remain functional, taxing authority is maintained (This is why we must go after tax evaders!) and our economic growth recovers, we're going to be ok. That is why it is important for the government to think of ways on how we can grow the economy while coexisting with COVID-19.

So far, international financial institutions have expressed confidence over our capacity to recover swiftly from this crisis. Otherwise, ‘di ‘yan magpapautang. So far, wala pa ni isang credit rating agency ang nag-downgrade ng credit rating natin. This means they are confident that we could pay off our debt obligations.

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