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Public Debt Management (Fiscal Administration perspective)
Chapter 6 of the document discusses public debt management in the Philippines, covering the theory, structure, and issues associated with public debt. It outlines different theories of public debt—including classical, neo-classical, and Keynesian—while detailing the classification, sources, and stages of public debt in the Philippines. The chapter emphasizes the importance of effectively managing public debt to avoid economic crises and includes relevant statistics and historical misconceptions about the Philippines' debt situation.
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Introduces public debt management and outlines the presentation focusing on theory, structure, issues, and patterns of governmental expenditures.
Introduces public debt management and outlines the presentation focusing on theory, structure, issues, and patterns of governmental expenditures.
Details various funding sources for the nation, including taxes, government asset sales, fees, penalties, and debt.
Discusses public debt management processes, emphasizing its importance in addressing budget deficits, financing, and economic stability.
Explains classical, neo-classical, and Keynesian theories of public debt, highlighting different perspectives on government borrowing.
Describes the four stages of public debt, classifications based on sources, categories, and maturity, along with current debt statistics.
Describes the four stages of public debt, classifications based on sources, categories, and maturity, along with current debt statistics.
Explains classification of debt into direct, guaranteed, and non-guaranteed categories, as well as details on short, medium, and long-term maturities.
Addresses common misconceptions regarding Philippine economic history and independence related to debt.
Provides sources for further reading on public debt and concludes with thanks from the presenter.
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Public Debt Management (Fiscal Administration perspective)
- 1. Chapter 6: Public DebtManagement Yosef Eric C. Hipolito, BA, LPT Grade 10 Curriculum chairman, SJS MAEd
- 3. Presentation overview: • Theoryof Public Debt • Structure of Philippine Public Debt • Organization for Philippine Expenditure • Patterns of governmental expenditures • Public debt: issues and problems
- 5. Sources of ournation’s fund and resources: • Taxes • Selling of government’s properties • Payments for IDs and certifications • Penalties • GOCCs • DEBT
- 6. Public Debt Management •Process of establishing and executing a strategy for managing the government’s debt in order to: - achieve its risk and cost objectives - raise the required amount of funding
- 7. Why is itimportant? • Poorly structured debt is a factor in inducing or propagating economic crises in many countries throughout history. - to meet budgetary deficit - to finance war - to provide foreign exchange - to check recession
- 8.
- 9. 1. Classical Theoryof Public Debt • Formed during 18th century (Age of Mercantilism) until 19th century (Age of Capitalism) • Theory that believes in the essence of “Laissez- Faire” policy
- 10. • Theory thathas a pessimistic point of view. • Its supporters believe that government borrowing is invariably wasteful, ruinous to prosperity, and even morally unjust.
- 11. 2. Neo-Classical Theoryof Public Debt • Extension of Classical Theory (later part of 19th century) • Formed by A.C. Pigou through his book “Economics is Welfare” • This theory believes that the economic system functions in response to the instructions of the market the ultimately the consumer.
- 12. 3. Keynesion Theoryof Public Debt • “Modern Theory of Public Debt” • Theory that states that the increase in public debt through the multiple effects would raise the National Income. • Government should control the economy • Formed after the “Great Depression in 1930”
- 13.
- 14. Four stages ofPublic Debt according to Angel Yoingco: 1. Borrowing the funds 2. Spending the funds 3. Raising revenue for payments 4. Actual debt repayment
- 16. Classification of PublicDebt according to: • Sources (Foreign and Domestic) • Category (Direct, Guaranteed and Non- guaranteed) • Maturity (Short term, Medium term and Long term)
- 17. 1. SOURCES: PhilippineDomestic Debt and Philippine Foreign Debt • Domestic Debt (Internal)- owed to lenders within the country. Examples: BSP Loans; Treasury securities • Foreign Debt (External)- owes to foreign creditors, complemented by internal debt owed to domestic lenders. Examples: IMF Loans; WB Loans
- 18. Domestic and ForeignDebt As of April 2018 (2nd Quarter of the year) Philippine General Debt- P70.34 Billion • Domestic Debt- P33.08 Billion • Foreign Debt- P37.26 Billion Source: Bureau of Treasury (BTr)
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- 25. 2. CATEGORY: Direct,Guaranteed and Non-guaranteed • Direct- made directly from lender to borrower, rather than a third party (National and Local) • Guaranteed- promise by a one party to assume the debt obligation of a borrower
- 26. • Non-guaranteed- notguaranteed for repayment by a public entity because it is payable solely from pledged specific for earnings of revenue (utilities, sewage disposal plants, toll bridges, etc.)
- 27. 3. MATURITY: Shortterm, Medium term and Long term • Short term- (current liabilities) any financial obligation that is either due within a 12-month period or due within the current fiscal year • Medium term- type of fixed income security with a maturity, or date of principal repayment, that is set to occur in two to 10 years
- 28. • Long term-any liabilities to be paid within 11 years and above
- 31. Misconceptions about Philippine debthistory: • Martial Law was a “Golden Age of Phil. Economy” • P1=$1 • Marcos’s declaration as “Philippines will be great again.”
- 32. “Our misfortunes areour own fault, let us blame nobody else for them. But as long as the Filipino people do not have sufficient vigour to proclaim, head held high and chest bared, their right to a life their own in human society and to guarantee it with their sacrifices, with their very blood if necessary. Why give them independence? What is the use of independence if the slaves of today, will become the tyrants of tomorrow? And no doubt they will, because whoever submits to tyranny, loves it!” -Padre Florentino (El Filibusterismo, 1891)
- 33. References: PUBLIC FISCAL ADMINISTRATION(PUBLIC BORROWING) https://www.slideshare.net/KarenAlanSamonte/public-debt-philippines SHORT, MEDIUM AND LONG TERM DEBT https://www.investopedia.com/terms/i/intermediatetermdebt.asp THEORETICAL ASPECTS OF PUBLIC DEBT. http://shodhganga.inflibnet.ac.in/bitstream/10603/147237/8/08%20theoreti cal%20aspects%20of%20public%20debt.pdf
- 34. Thank you! Yosef EricC. Hipolito, BA, LPT Grade 10 Curriculum chairman, SJS Master of Arts in Education- Educational Management