Examining the impacts of macroeconomic outcomes on Philippine public debt: An SVAR approach

• Main Author: Vasquez, Rogie Ann P.
• Format: text
• Language: English
• Published: Animo Repository 2018
• Subjects: Debts, Public—Philippines; Fiscal policy—Philippines; Philippines—Economic policy
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/6512; https://animorepository.dlsu.edu.ph/context/etd_masteral/article/13537/viewcontent/Vasquez__Rogie_Ann_P.__Final_MS_Economics_Thesis___Vasquez__Rogie_Ann2.pdf
• Institution: De La Salle University

We study how macroeconomic outcomes, such as inflation, growth, austerity, exchange rate, and interest rate affect public debt dynamics in the Philippines by introducing structural shocks using a structural vector autoregressive (SVAR) model. This paper uses post-­‐1994 quarterly data and incorporates debt feedback in the model specification to examine impulse responses of debt to the said variables. The results found that, to be effective, debt management and reduction policies should focus on austerity and deficit-reduction schemes, instead of merely pushing for GDP growth. Inflation must also be controlled in the process.