Government debt to climb past P19 trillion in 2026

MANILA, Philippines, August 17 ------ The national government’s outstanding debt is expected to breach P19 trillion next year, based on the Budget of Expenditures and Sources of Financing for fiscal year 2026. Data from the Department of Budget and Management (DBM) showed that the debt at the end of 2026 is seen rising by 9.8 percent to P19.06 trillion from P17.36 trillion this year.

The government’s expected debt includes P13.3 trillion from domestic accounts and P5.8 trillion from external borrowings, reflecting a significant reliance on both local and foreign financing to meet fiscal requirements. Latest data from the Bureau of the Treasury showed that the national government’s outstanding debt inched up by 2.1 percent to a record high of P17.27 trillion as of end-June from P16.92 trillion in end-May.

The total debt is already 99.5 percent of the total debt expectation this year. DBM Assistant Secretary Romeo Balanquit said the country’s debt-to-gross domestic product (GDP) ratio would improve to 60.3 percent over a three-year period. “Developed countries in general have higher debt-to-GDP ratio, and we are actually moving toward the upper-middle income category, so you expect really to be a country (headed) toward that direction to be aggressive in borrowings,” he said.

According to Balanquit, the debt-to-GDP ratio for this year would settle at 61.3 percent and increase to 61.8 percent in 2026. The ratio is seen improving to 61.3 percent in 2027 and 60.3 in 2028. The country’s nominal GDP for next year is projected to reach P30.85 trillion from this year’s P28.35 trillion. This represents the value of all the final goods without adjusting for inflation.

In sources of financing, gross external borrowings are projected to increase by over P130 billion, reaching P627.1 billion next year. Conversely, gross domestic borrowings are expected to decline by nearly three percent, to P2.05 trillion from P2.11 trillion this year, according to government financing projections. Meanwhile, the expected revenue program for next year is at P4.98 trillion. This includes revenues from tax, non-tax and privatization incomes of the government, which are expected to increase to P5.37 trillion by 2027. Tax revenues for 2026 is estimated to widen by P4.6 trillion, and represents a 9.3 percent increase from this year’s P4.21 trillion projected revenues.

Source: philstar.com