Search This Blog

Monday, July 23, 2012

How Leveraged is the Philippine Economy Relative to Other Global Economies?


Today is a doozy.  Spain is imploding and has followed Italy in imposing a short selling ban.  Six countries out of seventeen countries in the Eurozone are already in recession.  Greece and Ireland are in a depression. The US is at or is nearing a recession.  China, the world's second largest economy, is slowing.  So is India.

It's been obvious for some time that large swaths of Europe are in a sovereign debt crisis.  First, Iceland, then Ireland, then Greece and Portugal, and now Spain.  Italy soon to follow.  Quite a bit of blame for the crisis has been placed on the creation of the Euro currency, which allowed the monetary but not fiscal and economic union of the Eurozone countries, resulting in economic imbalances between those countries and the rest of the world.  Quite a bit of blame has also been placed on the financial leverage of those economies.  Greece, which recently had the largest debt restructuring of a sovereign nation and whose debtholders experienced a 75% haircut, will, if all goes well, still have a debt to GDP ratio of 120% by 2020!

So all this brings to mind the question: How leveraged is the Philippine economy relative to other global economies?  Are we the next Greece or Spain.  Based on the latest available data, we are at or below the global average.

With a Public Debt to GDP Ratio of 48.89% as of 2009, we are slightly above the global average of 47.90%.


Global Economies
Public Debt
As % of GDP
Year 2009





Public Debt
Country(% of GDP)
Liberia224.13
Japan217.60
Guinea-Bissau163.31
Lebanon147.97
Congo, Dem. Rep. of138.26
Jamaica137.44
Eritrea134.97
Seychelles127.34
Grenada122.30
Antigua and Barbuda118.26
Italy115.77
Greece115.16
Singapore109.98
Barbados105.36
Iceland99.87
Belgium96.80
Dominica85.29
Sri Lanka85.27
United States84.26
Belize81.42
Nicaragua81.28
Sudan80.60
Hungary78.26
France78.07
India77.69
Israel77.57
Portugal76.30
Egypt76.18
Bhutan74.74
Germany73.51
Cape Verde70.76
Brazil68.90
Malta68.66
United Kingdom68.49
Austria67.11
Ghana66.48
Sao Tome and Principe65.78
Ireland65.53
Cote d'Ivoire65.01
Netherlands61.77
Lao People's Democratic Republic61.64
Jordan61.39
Uruguay60.65
Guyana60.53
Albania59.51
Argentina59.02
Gambia, The58.29
Congo, Republic of57.59
Pakistan57.29
Comoros56.93
Cyprus56.22
Malaysia55.38
Togo55.22
Cameroon54.06
Fiji53.50
Spain53.10
Burundi52.28
Yemen, Republic of51.04
Poland50.92
Mauritius49.28
Kenya49.17
Vietnam49.04
Philippines48.89
El Salvador48.55
Morocco47.71
Malawi45.51
Turkey45.50
Lesotho45.35
Mexico44.94
Thailand44.22
Finland43.90
Bangladesh43.48
Tunisia42.78
Tanzania42.76
Sweden41.63
Denmark41.45
Bahamas, The41.26
Armenia40.63
Bolivia40.54
Panama39.87
Djibouti39.53
Nepal39.39
Switzerland39.02
Angola38.28
Tonga38.25
Georgia37.38
Qatar36.70
Venezuela36.38
Trinidad and Tobago35.45
Croatia35.41
Bosnia and Herzegovina35.37
Czech Republic35.34
Colombia35.19
Ukraine34.64
Madagascar33.74
Latvia32.83
Korea, Republic of32.56
Senegal31.96
Chad31.41
South Africa30.84
Romania29.91
Lithuania29.46
Slovenia29.38
Mozambique29.31
Cambodia28.75
Indonesia28.60
Dominican Republic28.44
Solomon Islands28.28
Costa Rica28.02
Burkina Faso27.86
Zambia27.67
Moldova27.56
Benin27.52
Peru27.38
Syrian Arab Republic27.32
United Arab Emirates27.12
Central African Republic26.90
Bahrain26.58
New Zealand26.16
Gabon26.07
Belarus25.15
Haiti24.77
Mali23.93
Honduras23.68
Guatemala22.96
Uganda22.22
Iran, Islamic Republic of21.58
Macedonia, former Yugoslav Republic of20.82
Suriname20.35
China, People's Republic of18.59
Paraguay18.04
Australia17.63
Luxembourg16.46
Bulgaria16.06
Saudi Arabia15.97
Niger15.78
Namibia15.74
Nigeria15.49
Botswana14.96
Ecuador14.67
Swaziland14.66
Kuwait14.33
Azerbaijan12.11
Kazakhstan10.93
Russian Federation10.88
Hong Kong SAR10.22
Oman7.75
Estonia7.15
Chile6.21
Maldives0.00
Montenegro0.00
Vanuatu0.00
Mauritania0.00
Serbia0.00
Samoa0.00
Papua New Guinea0.00
Brunei Darussalam0.00
Mongolia0.00
Kosovo0.00
Sierra Leone0.00
Afghanistan, Islamic Rep. of0.00
Global Average47.90


Source: www.imf.org


With Private Debt to GDP Ratio of 48.70% as of 2009, we are way below the global average of 72.18%.



Global Economies
Private Debt
As % of GDP
Year 2009





Private Debt
Country(% of GDP)
Japan327.80
Cyprus302.90
United States234.90
United Kingdom229.20
Spain229.10
Netherlands224.10
Ireland223.80
Denmark221.90
Portugal195.10
Switzerland193.10
Luxembourg189.80
South Africa184.20
Iceland182.80
Hong Kong SAR167.80
Lebanon163.10
Malta157.40
New Zealand154.20
China, People's Republic of145.10
Liberia144.30
Sweden144.10
Australia143.70
Italy141.60
Austria140.90
Fiji139.60
Malaysia137.40
Thailand137.00
Barbados136.30
Germany133.10
France128.80
Vietnam123.00
Belgium118.80
Greece115.60
Eritrea113.10
Korea, Republic of109.40
Mauritius106.80
Estonia105.40
Jordan104.60
Bahamas, The102.70
Morocco100.80
Antigua and Barbuda98.00
Finland98.00
United Arab Emirates97.50
Singapore97.20
Brazil95.80
Latvia94.30
Chile93.50
Slovenia93.40
Ukraine88.60
Grenada87.40
Kuwait86.80
Maldives86.50
Israel85.90
Bahrain84.60
Panama83.80
Hungary81.40
Cape Verde78.10
Croatia76.40
Qatar76.20
Montenegro76.20
Egypt75.10
Belize73.00
India70.40
Lithuania70.00
Bulgaria69.60
Nepal69.10
Tunisia68.30
Albania68.00
Nicaragua66.70
Turkey63.00
Vanuatu61.60
Colombia61.50
Poland61.40
Czech Republic60.50
Bangladesh60.40
Jamaica57.90
Honduras54.70
Costa Rica54.60
Kazakhstan54.60
Bosnia and Herzegovina52.90
Mauritania52.90
Romania52.70
Bolivia49.50
Guyana49.10
Dominica48.70
Philippines48.70
Pakistan48.40
Serbia48.00
Samoa46.50
Namibia46.00
El Salvador45.40
Seychelles44.30
Mexico43.70
Syrian Arab Republic43.60
Macedonia, former Yugoslav Republic of43.50
Tonga43.20
Kenya43.10
Moldova41.40
Oman41.30
Dominican Republic40.60
Sri Lanka39.60
Guatemala39.20
Papua New Guinea39.00
Iran, Islamic Republic of37.20
Indonesia37.00
Nigeria36.90
Solomon Islands35.10
Belarus34.10
Russian Federation33.70
Georgia32.90
Djibouti32.30
Trinidad and Tobago32.30
Brunei Darussalam32.20
Malawi32.00
Bhutan30.90
Paraguay30.20
Mongolia29.60
Angola29.20
Uruguay28.80
Ghana28.70
Gambia, The28.60
Argentina28.00
Togo27.30
Senegal26.60
Suriname26.20
Venezuela25.90
Sao Tome and Principe25.40
Ecuador24.40
Haiti23.60
Burundi23.40
Cote d'Ivoire23.00
Mozambique22.60
Azerbaijan22.50
Lao People's Democratic Republic20.80
Comoros20.50
Yemen, Republic of20.30
Sudan20.00
Armenia20.00
Benin19.30
Cambodia19.10
Peru18.90
Zambia18.50
Tanzania18.10
Central African Republic15.30
Burkina Faso14.80
Kosovo14.10
Niger12.50
Madagascar11.80
Uganda11.80
Sierra Leone10.90
Mali10.70
Swaziland9.10
Cameroon8.30
Chad8.00
Gabon7.60
Congo, Dem. Rep. of7.30
Guinea-Bissau4.90
Afghanistan, Islamic Rep. of3.40
Saudi Arabia0.60
Botswana-1.00
Lesotho-14.70
Congo, Republic of-15.90
Global Average72.18




Source: www.worldbank.org, www.imf.org


In terms of our Total Debt to GDP Ratio, the Philippines has a Total Debt to GDP Ratio of 97.59% as of 2009, far below the global average of 120.07%.


Global Economies


Public Debt, Private Debt, and Total Debt


As % of GDP


Year 2009











Public DebtPrivate DebtTotal Debt
Country(% of GDP)(% of GDP)(% of GDP)
Japan217.60327.80545.40
Liberia224.13144.30368.43
Cyprus56.22302.90359.12
United States84.26234.90319.16
Lebanon147.97163.10311.07
United Kingdom68.49229.20297.69
Ireland65.53223.80289.33
Netherlands61.77224.10285.87
Iceland99.87182.80282.67
Spain53.10229.10282.20
Portugal76.30195.10271.40
Denmark41.45221.90263.35
Italy115.77141.60257.37
Eritrea134.97113.10248.07
Barbados105.36136.30241.66
Switzerland39.02193.10232.12
Greece115.16115.60230.76
Malta68.66157.40226.06
Antigua and Barbuda118.2698.00216.26
Belgium96.80118.80215.60
South Africa30.84184.20215.04
Grenada122.3087.40209.70
Austria67.11140.90208.01
Singapore109.9897.20207.18
France78.07128.80206.87
Germany73.51133.10206.61
Luxembourg16.46189.80206.26
Jamaica137.4457.90195.34
Fiji53.50139.60193.10
Malaysia55.38137.40192.78
Sweden41.63144.10185.73
Thailand44.22137.00181.22
New Zealand26.16154.20180.36
Hong Kong SAR10.22167.80178.02
Vietnam49.04123.00172.04
Seychelles127.3444.30171.64
Guinea-Bissau163.314.90168.21
Jordan61.39104.60165.99
Brazil68.9095.80164.70
China, People's Republic of18.59145.10163.69
Israel77.5785.90163.47
Australia17.63143.70161.33
Hungary78.2681.40159.66
Mauritius49.28106.80156.08
Belize81.4273.00154.42
Egypt76.1875.10151.28
Cape Verde70.7678.10148.86
Morocco47.71100.80148.51
India77.6970.40148.09
Nicaragua81.2866.70147.98
Congo, Dem. Rep. of138.267.30145.56
Bahamas, The41.26102.70143.96
Korea, Republic of32.56109.40141.96
Finland43.9098.00141.90
Dominica85.2948.70133.99
Albania59.5168.00127.51
Latvia32.8394.30127.13
Sri Lanka85.2739.60124.87
United Arab Emirates27.1297.50124.62
Panama39.8783.80123.67
Ukraine34.6488.60123.24
Slovenia29.3893.40122.78
Qatar36.7076.20112.90
Estonia7.15105.40112.55
Poland50.9261.40112.32
Croatia35.4176.40111.81
Bahrain26.5884.60111.18
Tunisia42.7868.30111.08
Guyana60.5349.10109.63
Turkey45.5063.00108.50
Nepal39.3969.10108.49
Pakistan57.2948.40105.69
Bhutan74.7430.90105.64
Bangladesh43.4860.40103.88
Kuwait14.3386.80101.13
Sudan80.6020.00100.60
Chile6.2193.5099.71
Lithuania29.4670.0099.46
Philippines48.8948.7097.59
Colombia35.1961.5096.69
Czech Republic35.3460.5095.84
Ghana66.4828.7095.18
El Salvador48.5545.4093.95
Kenya49.1743.1092.27
Sao Tome and Principe65.7825.4091.18
Bolivia40.5449.5090.04
Uruguay60.6528.8089.45
Mexico44.9443.7088.64
Bosnia and Herzegovina35.3752.9088.27
Cote d'Ivoire65.0123.0088.01
Argentina59.0228.0087.02
Gambia, The58.2928.6086.89
Maldives0.0086.5086.50
Bulgaria16.0669.6085.66
Costa Rica28.0254.6082.62
Romania29.9152.7082.61
Togo55.2227.3082.52
Lao People's Democratic Republic61.6420.8082.44
Tonga38.2543.2081.45
Honduras23.6854.7078.38
Malawi45.5132.0077.51
Comoros56.9320.5077.43
Montenegro0.0076.2076.20
Burundi52.2823.4075.68
Djibouti39.5332.3071.83
Yemen, Republic of51.0420.3071.34
Syrian Arab Republic27.3243.6070.92
Georgia37.3832.9070.28
Dominican Republic28.4440.6069.04
Moldova27.5641.4068.96
Trinidad and Tobago35.4532.3067.75
Angola38.2829.2067.48
Indonesia28.6037.0065.60
Kazakhstan10.9354.6065.53
Macedonia, former Yugoslav Republic of20.8243.5064.32
Solomon Islands28.2835.1063.38
Cameroon54.068.3062.36
Venezuela36.3825.9062.28
Guatemala22.9639.2062.16
Namibia15.7446.0061.74
Vanuatu0.0061.6061.60
Tanzania42.7618.1060.86
Armenia40.6320.0060.63
Belarus25.1534.1059.25
Iran, Islamic Republic of21.5837.2058.78
Senegal31.9626.6058.56
Mauritania0.0052.9052.90
Nigeria15.4936.9052.39
Mozambique29.3122.6051.91
Oman7.7541.3049.05
Haiti24.7723.6048.37
Paraguay18.0430.2048.24
Serbia0.0048.0048.00
Cambodia28.7519.1047.85
Benin27.5219.3046.82
Suriname20.3526.2046.55
Samoa0.0046.5046.50
Peru27.3818.9046.28
Zambia27.6718.5046.17
Madagascar33.7411.8045.54
Russian Federation10.8833.7044.58
Burkina Faso27.8614.8042.66
Central African Republic26.9015.3042.20
Congo, Republic of57.59-15.9041.69
Chad31.418.0039.41
Ecuador14.6724.4039.07
Papua New Guinea0.0039.0039.00
Mali23.9310.7034.63
Azerbaijan12.1122.5034.61
Uganda22.2211.8034.02
Gabon26.077.6033.67
Brunei Darussalam0.0032.2032.20
Lesotho45.35-14.7030.65
Mongolia0.0029.6029.60
Niger15.7812.5028.28
Swaziland14.669.1023.76
Saudi Arabia15.970.6016.57
Kosovo0.0014.1014.10
Botswana14.96-1.0013.96
Sierra Leone0.0010.9010.90
Afghanistan, Islamic Rep. of0.003.403.40
Global Average47.9072.18120.07








Source: www.worldbank.org, www.imf.org




The Philippines is totally not out of the woods yet.  Since at least 60% of the global economy is experiencing a slowdown, there's a strong chance that the Philippine economy will experience a slowdown as well in the not too distant future. Let's not forget that the economies of Iceland, Ireland, and Spain were brought down by a banking crisis.  Iceland's banking sector was huge relative to the size of its economy and when the financial crisis of 2008 struck, it's banking system collapsed as well.  Both Ireland and Spain experienced massive real estate bubbles.  The their subsequent bursting led to an explosion of non-performing loans in the banking system.  The ratio of Philippine NPLs to GDP was only 1.61% as of 2011, well below the global average of 5.56% for the same period.  Lest we get too complacent, we have to remember that Ireland's NPL to GDP ratio was only 1.56% in 2007.  A year later, during the 2008 financial crisis, it was 5.39%.  The following year, it nearly quadrupled to 20.14% and has remained above 20% ever since.  We could suffer the same fate, if we're not too careful.


Global Economies
NPL as a % of GDP
2007 to 2010












Country name20072008200920102011
Iceland0.00%0.00%82.63%66.59%56.92%
Ireland1.56%5.39%20.14%20.06%20.76%
Cyprus0.00%10.08%13.63%17.68%20.14%
Greece5.12%5.80%8.90%15.13%17.08%
Latvia0.72%3.22%15.47%17.02%14.59%
Malta6.94%6.91%8.81%11.22%11.62%
Ukraine1.83%3.20%12.14%12.16%11.30%
Lithuania0.60%2.95%13.51%12.73%10.98%
United States3.42%6.66%12.68%11.41%10.97%
Kazakhstan0.00%2.76%11.58%10.81%10.68%
Serbia0.00%4.55%7.44%9.73%10.23%
Croatia3.44%3.65%5.96%9.21%10.18%
Albania2.11%4.36%7.14%9.33%9.95%
Bulgaria1.17%1.61%4.45%8.44%9.64%
Denmark1.23%2.52%7.32%8.83%9.06%
Hungary1.74%2.43%5.45%7.92%7.87%
Romania0.91%1.33%4.16%6.53%7.37%
Bosnia and Herzegovina1.86%2.08%3.12%7.41%6.75%
Pakistan3.68%5.59%6.10%6.81%6.65%
Lebanon18.34%12.62%9.79%7.07%6.60%
Portugal2.32%3.20%5.46%6.90%6.53%
Netherlands0.00%3.33%7.17%5.94%5.70%
Morocco7.19%5.92%5.54%4.66%5.59%
Poland2.41%2.69%4.91%5.59%5.56%
Thailand10.40%7.44%7.26%5.28%5.28%
Ghana1.47%2.15%4.65%5.00%4.76%
Estonia0.45%1.82%5.48%5.34%4.46%
South Africa2.73%6.78%10.87%10.58%4.42%
Macedonia, FYR2.51%2.77%3.87%4.37%4.25%
Moldova1.49%2.07%6.79%4.95%4.23%
Bhutan0.00%0.00%2.10%2.11%3.89%
Malaysia7.37%5.52%4.95%4.49%3.83%
Czech Republic1.39%1.78%3.15%3.90%3.81%
Austria2.79%2.49%3.24%3.85%3.65%
Georgia0.81%4.19%5.86%4.15%3.53%
Russian Federation0.61%0.91%3.20%3.15%3.26%
Australia0.82%1.86%2.87%3.25%3.21%
Brazil2.77%3.00%4.02%2.95%3.15%
Mauritius2.48%2.16%3.52%3.11%3.10%
Kenya3.94%3.59%3.40%3.21%2.81%
Seychelles1.81%1.34%1.68%2.85%2.60%
Sierra Leone0.20%1.32%1.16%2.87%2.58%
Chile0.68%0.93%2.71%2.40%2.40%
Turkey1.77%2.00%3.53%2.64%2.15%
Colombia1.68%2.16%2.46%1.90%1.91%
El Salvador0.98%1.30%1.68%1.74%1.74%
Philippines*2.80%2.13%2.00%1.87%1.61%
China7.92%2.90%2.32%1.61%1.60%
Hong Kong SAR, China1.00%1.50%2.68%1.59%1.48%
Armenia0.29%0.75%0.96%0.77%1.43%
Dominican Republic1.57%1.33%1.62%1.15%1.21%
Costa Rica0.58%0.81%1.09%0.96%1.17%
Indonesia1.66%1.18%1.22%0.95%1.12%
Belarus0.51%0.56%1.43%1.59%1.07%
Panama1.23%1.46%1.17%0.96%1.01%
Namibia1.36%1.36%1.24%1.06%0.98%
Bolivia3.00%2.08%1.73%1.09%0.95%
Ecuador0.84%0.76%1.00%0.92%0.95%
Mexico0.89%1.12%1.22%0.90%0.91%
Oman1.05%0.61%1.45%1.24%0.87%
Guatemala0.61%0.84%1.06%0.81%0.78%
Venezuela, RB0.24%0.38%0.78%0.77%0.73%
Paraguay0.25%0.28%0.48%0.42%0.62%
Mozambique0.26%0.26%0.41%0.49%0.57%
Luxembourg0.73%1.10%1.33%0.37%0.51%
Finland0.26%0.35%0.59%0.60%0.50%
Argentina0.77%0.66%0.84%0.53%0.47%
Peru0.43%0.42%0.51%0.47%0.47%
Uganda0.23%0.27%0.50%0.35%0.47%
Lesotho-0.55%-0.74%-0.54%-0.23%0.02%
Montenegro2.50%6.34%10.29%14.26%NA
Italy5.90%6.47%9.91%12.08%NA
Spain1.78%6.01%9.39%10.76%NA
Tunisia11.33%10.17%9.02%8.93%NA
United Kingdom1.69%3.42%8.02%8.90%NA
Jordan4.69%4.66%7.01%7.89%NA
Egypt, Arab Rep.16.23%11.50%10.06%7.63%NA
Nigeria1.92%0.08%10.74%6.14%NA
Kuwait2.61%4.44%9.98%5.87%NA
Japan4.17%5.12%6.23%5.87%NA
Senegal4.54%4.26%4.97%5.86%NA
France3.29%3.48%4.64%5.58%NA
United Arab Emirates1.74%1.68%4.19%5.17%NA
Slovenia1.47%1.57%2.15%3.51%NA
Belgium1.34%1.92%3.68%3.28%NA
Korea, Rep.0.69%1.20%1.31%1.96%NA
India1.52%1.56%1.62%1.75%NA
Singapore1.04%1.40%2.33%1.51%NA
Swaziland0.49%0.14%0.74%1.38%NA
Gabon0.22%0.52%0.55%1.00%NA
Uruguay0.27%0.35%0.35%0.32%NA
Germany3.37%3.67%4.39%NANA
Sweden0.78%1.35%2.88%NANA
Israel1.31%1.35%1.20%NANA
Switzerland0.55%0.91%0.77%NANA
Kosovo0.00%0.39%0.62%NANA
Global Average2.28%2.78%5.48%5.76%5.56%












* Estimated 2011
Source: www.worldbank.org, www.bsp.gov.ph

No comments:

Post a Comment