, July 9 , 2004
By Des Ferriols  -  As the finance department aligned its accounting standards with the International Monetary Fund (IMF), officials said the government may be overstating its outstanding debt by as much as P1 trillion.

The DOF has been withholding the monthly statement of its outstanding obligations since March, saying that it was restating the numbers based on the financial manuals of the IMF.

Finance Secretary Juanita Amatong told reporters yesterday that the review conducted by the IMF and the DOF indicated that there was double-counting in some parts of the debt portfolio but she refused to say how much was actually overstated.

"We just aligned our standards and protocol with what the IMF is using because that’s how everyone does it," Amatong said.

"Based on that, we saw that we were counting some debts more than once. So our debt might actually be smaller than what we think."

The DOF has been keeping the full-year 2003 debt level under wraps but the initial clean-up of the portfolio indicated that the outstanding debt stood at around P4.8 trillion as of end-December, down from around P5.9 trillion as of September 2003.

The outstanding debt stock includes the borrowings of the National Government and the debt reported by government financial institutions (GFIs) and government-owned and controlled corporations (GOCCs).

Sources said the emerging number only includes the restated outstanding debt of GFIs and the final figure would go down further upon the completion of the revised reports from GOCCs.

According to sources, the outstanding debt has been "overstated" since 1999 because GOCCs and GFIs were reporting not only their actual borrowings but also other liabilities such as accruing expenses and reserve liabilities.

"What the IMF wants us to sort out is the actual borrowing by NG, GFIs and GOCCs," said the source. "What they want to see is the principal borrowing and the interest. That’s it."

The source said the clean-up was based on the standards set in the IMF’s financial manual that disaggregated actual borrowings from other liabilities.

The source said the IMF wanted a harmonized standard of reporting of debts and obligations for all its members and the on-going review was likely to affect not only the Philippines’ debt stock but possibly the global debt stock as other countries begin to comply with the harmonization.

"Technically, accruing expenses and reserve liabilities are still obligations that have to be paid but when listing down actual debt, it would only cover actual borrowing," the source explained.

According to the source, the NG debt would not be affected by the reclassification since the NG only reports its actual borrowing that now stood at around P3 trillion.

The source said the debt stock was being reviewed and reclassified since 1999 using the IMF manual and the resulting total will continue to go down from the initial P4.8 trillion.

Reported by: Sol Jose Vanzi

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