The 2027 budget the House is preparing to pass on second reading carries a line most debates skip: ₱1.114 trillion for interest payments, or 15.9 percent of the ₱7.2-trillion total, on debt projected to hit a record ₱21.479 trillion.
The figures come from the Inquirer's Nyah Genelle C. De Leon, who reported on Aug. 12 on the government's own projections. That report predates this week's floor debates, but the numbers are the ones attached to the budget now moving through Congress, and we found no newer official revision.
The numbers
Per the Inquirer: debt is projected at ₱19.765 trillion in 2026 and ₱21.479 trillion in 2027, with domestic debt at ₱14.282 trillion and external debt at ₱7.197 trillion. The 2027 debt-to-GDP ratio is projected at 64.4 percent. Principal amortization adds ₱1.590 trillion on top of interest, and the fiscal deficit is projected at ₱1.694 trillion, or 5.1 percent of GDP, assuming an exchange rate of ₱62 to the dollar. The debt is up 68 percent from ₱12.79 trillion when the Marcos administration began in June 2022.
Our own recent reporting has shown the deficit through August at ₱1.05 trillion, and a record ₱19.39 trillion in debt as of the Finance Department's forecasting restart. The projections above assume borrowing continues to grow.
The official explanation
DBM Assistant Secretary Romeo Balanquit explained to the Inquirer: "Our old loans were contracted at a lower interest rate. Now they are maturing. So we have to refinance using new loans. But worse because this will be at a higher interest rate." The Inquirer also noted the peso has slid roughly 20 percent since the pandemic, from ₱49.6 to about ₱60 per dollar.
That is a rare candid line from a budget official: the government is telling taxpayers the cost of yesterday's borrowing is being rolled into a more expensive tomorrow. What it does not say is what the plan is to stop it. The ₱62 exchange-rate assumption is also worth watching; a weaker peso raises the peso cost of servicing external debt, and we have reported that ANZ expects the peso to hit ₱64 by year-end.
What we do not know
We could not access the BusinessWorld report on the debt-to-GDP target, so we cannot say how the Finance Department reconciles a target it calls achievable with a projected 64.4 percent ratio. That question should be put to the department directly.
Context
Interest is not discretionary spending: unlike the flood control lines under Senate review, no committee can strike it. Every peso of the ₱1.114 trillion is a peso not available for schools, hospitals or the infrastructure the scandal-hit budget keeps promising.
Sources
- Philippine Daily Inquirer (Nyah Genelle C. De Leon), "PH gov't debt seen surging to record high P21.5T in '27" (Aug. 12, 2026) — https://business.inquirer.net/605260/ph-govt-debt-seen-surging-to-record-high-p21-5t-in-27
- Pulpulitiko prior reporting on the 2027 budget and the August deficit.