Construction of an Index Tracker for Debt Sustainability Assessment in the Philippines

Armin Paul Allado, Lance Nicklaus Lim, Nerie Angeli Tulauan, Marvin Kyle Abreu, Patricia Louise Agabin and Joaquin Charles Regio
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Armin Paul Allado: Asian Development Bank Institute
Lance Nicklaus Lim: Asian Development Bank Institute
Nerie Angeli Tulauan: Asian Development Bank Institute
Marvin Kyle Abreu: Asian Development Bank Institute
Patricia Louise Agabin: Asian Development Bank Institute
Joaquin Charles Regio: Asian Development Bank Institute

No 1339, ADBI Working Papers from Asian Development Bank Institute

Abstract: With economies around the world facing more dire challenges as an immediate result of the COVID-19 pandemic, the need for national governments to borrow funds has grown. The abrupt increase in debt level highlights the importance of implementing suitable models to project emerging debt scenarios and assess debt sustainability. Given that sustainable debt levels vary from country to country, we applied the IMF’s Debt Sustainability Analysis to assess the Philippines’ debt burden over time to be used as an input in the construction of a debt index tracker that incorporates other relevant fiscal and economic indicators. The index tracker serves as an aggregate barometer on whether debt levels have breached the sustainable threshold level. Furthermore, we will utilize the debt tracker to show the implicit debt ceiling and the available fiscal policy room that can respond to the next potential shock.

Keywords: debt sustainability; Debt Index tracker; sustainable debt threshold level; implicit debt ceiling; available fiscal space (search for similar items in EconPapers)
JEL-codes: H63 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2022-09
New Economics Papers: this item is included in nep-sea
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