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The Department of Budget and Management (DBM) is projecting that the national government's outstanding debt will surge to a record ₱21.48 trillion by the end of 2027 — an 8.7% jump from the revised ₱19.77-trillion estimate for this year — according to the Budget of Expenditures and Sources of Financing (BESF) transmitted to Congress alongside the proposed 2027 national budget on Aug. 11. The DBM attributed the higher projection to the peso's continued depreciation against the US dollar and a larger borrowing program, according to reports by Philstar.com, BusinessWorld, Manila Bulletin, and the Philippine Daily Inquirer.
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Of the projected ₱21.48-trillion debt stock for end-2027, ₱14.28 trillion is expected to come from domestic creditors and ₱7.2 trillion from external sources, Philstar.com reported, citing the BESF. The debt-to-GDP ratio — a key measure of fiscal sustainability — is projected to settle at 64.9% this year before easing slightly to 64.4% in 2027, still well above the 60% threshold that credit-rating agencies and multilateral lenders generally consider the manageable ceiling for developing economies.
The DBM's projection assumes a peso-dollar exchange rate of ₱62 to the dollar, a level the currency has already approached: Bloomberg reported the peso fell to a fresh record low on Aug. 19 as rising oil prices strengthened the US dollar, while GMA News Online's tracking of the exchange rate showed the peso trading as high as ₱61.7069 on Aug. 18. Because a portion of the country's debt is denominated in foreign currency, every centavo of peso depreciation mechanically inflates the peso value of those obligations — a dynamic Budget Assistant Secretary Romeo Matthew T. Balanquit has previously flagged to reporters, noting that a large share of foreign-currency loans were contracted during the pandemic when the peso traded around ₱46.60 to the dollar.
The debt projection is not a distant scenario. The national government's actual outstanding debt already hit a record ₱19.065 trillion as of end-June 2026 — a 66% debt-to-GDP ratio, a level last seen in 1993 — according to Bureau of the Treasury data reported by GMA News Online and Inquirer.net. That milestone arrived roughly six months ahead of the administration's own year-end projection, underscoring how quickly the debt trajectory has outpaced official forecasts this year.
Behind the higher 2027 figure is also a larger borrowing appetite: the Marcos administration raised its planned gross borrowings for 2027 to ₱3.3 trillion, a 21% increase from the ₱2.73-trillion program for 2026, Philstar.com and BusinessMirror reported. Officials cited higher principal repayments on maturing debt and a slower-than-hoped pace of fiscal consolidation as additional drivers, alongside continued deficit spending.
Independent economists have warned the debt trajectory is sensitive to how long the peso stays weak. John Paolo Rivera, senior research fellow at the Philippine Institute for Development Studies, said in earlier remarks reported by the Inquirer that sovereign debt "can increase beyond the programmed level if the peso remains weak for a prolonged period, especially since a portion of our debt is denominated in foreign currency." Economists at De La Salle University, in a separate report cited by the Inquirer, projected the peso could hit a "weakest point" of around ₱63.5 to the dollar before any recovery.
Neither the DBM nor the Department of Finance has publicly responded as of this writing to questions about whether contingency measures — such as accelerated hedging of foreign-currency exposure or additional revenue measures — are being considered to offset the currency-driven debt growth. Pulpulitiko was unable to independently reach DBM or Bureau of the Treasury officials for comment before publication.
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The debt projection lands as Congress begins deliberating the ₱7.2-trillion 2027 national budget, which Pulpulitiko previously reported opened amid separate scrutiny over an alleged per-senator "leadership fund" embedded in past DPWH budgets. Rising debt service costs compete directly with funding for infrastructure, social services, and disaster response — an especially pointed tension after the Aug. 17 Metro Manila flash floods, which killed at least 27 people despite ₱1.94 trillion in cumulative flood-control spending since 2011, a figure flagged by Sen. Panfilo Lacson and reported by Pulpulitiko on Aug. 18. Under the 1987 Constitution and the Government Auditing Code, debt-service appropriations are automatically funded ahead of most other government spending, meaning a larger debt stock structurally narrows the fiscal space available for discretionary programs in future budgets.
Sources
- Government debt may surpass P21 trillion — Philstar.com
- NG debt seen hitting record P21.48 trillion in 2027 — BusinessWorld
- Gov't debt set to surge past ₱21 trillion by 2027 as borrowing escalates — Manila Bulletin
- PH gov't debt seen surging to record high P21.5T in '27 — Inquirer.net
- PH government debt stock tops P19 trillion — Inquirer.net
- Government debt climbs to record P19.1 trillion — Philstar.com
- Philippine Peso Falls to Record Low as Oil Prices Rise — Bloomberg
- Peso-dollar exchange rate tracker — GMA News Online