Hello, PIDS friends! Here's our #PIDSFactFriday for the week on the fiscal effects of the COVID-19 pandemic.
A PIDS study that assessed the public debt sustainability in the Philippines found that the country’s debt position today is less worrisome than it had been during previous debt crises. However, given the need to spend to prevent possible scarring (i.e., long-lasting damage to the economy) from the pandemic and give the economy time and room to recover from the pandemic crisis, it may not be feasible to immediately return to pre-COVID-19 debt ratios based on fiscal gap computations. Thus, a sound medium- to long-term fiscal consolidation (i.e., policies to reduce government deficits and debt accumulation) is imperative.
Know more about the study titled “Fiscal Effects of the COVID-19 Pandemic: Assessing Public Debt Sustainability in the Philippines” here: https://pidswebs.pids.gov.ph/CDN/document/pidsdps2217.pdf