MANILA, Philippines — The national government's outstanding debt is projected to breach ₱21 trillion for the first time, hitting a record ₱21.48 trillion by the end of 2027, according to medium-term financial projections in the Budget of Expenditures and Sources of Financing (BESF) that the Department of Budget and Management submitted to Congress alongside President Marcos' proposed ₱7.2-trillion 2027 national budget. Manila Bulletin, which first reported the projections on Aug. 11, said total liabilities are expected to expand to ₱19.77 trillion by the end of 2026 — an 11.6 percent jump from ₱17.71 trillion at end-2025.
The debt buildup is being driven by an increase in the government's borrowing program: total gross borrowings are set to climb to ₱3.30 trillion in 2027, up from ₱2.73 trillion programmed for 2026, per the BESF figures reported by Manila Bulletin. Domestic borrowing is projected to rise to ₱2.39 trillion from ₱1.92 trillion, driven mainly by fixed-rate Treasury bonds, while external gross borrowings are expected to increase to ₱914.98 billion from ₱815.5 billion, including ₱365.98 billion from offshore commercial bonds and other market instruments.
Finance Secretary Frederick D. Go told Manila Bulletin the government retains "sufficient fiscal space" to increase borrowing for infrastructure and development, playing down concerns over a debt-to-GDP ratio that, at 66 percent as of end-June 2026, is already at its highest level in 21 years — since the Arroyo administration's 71.6 percent peak in 2004. In his budget message accompanying the 2027 spending plan, President Marcos described the record proposal not merely as a financial document but as "a strategic investment in the Filipino people," according to Manila Bulletin.
The rising debt load carries a direct cost: debt service expenditures are projected to surge 32.2 percent to a record ₱2.70 trillion in 2027, up from ₱2.05 trillion in 2026, per the BESF data. Separately, Philstar.com reported on Aug. 12 — citing DBM figures — that the debt projection also reflects the impact of a depreciating peso on the peso value of foreign-currency-denominated obligations. Principal repayments alone are expected to jump more than 50 percent, to ₱1.59 trillion in 2027 from ₱1.05 trillion in 2026, while interest payments are set to rise 11.9 percent to ₱1.11 trillion. The government's fiscal deficit is projected at ₱1.69 trillion for 2027, marginally higher than the ₱1.66 trillion projected for 2026.
Neither the DBM nor the Department of Finance has, as of this report, addressed how rising debt-service costs — projected to consume an increasing share of the budget — will affect funding for social services or the infrastructure programs the borrowing is meant to finance. Congress had not yet begun formal deliberations on the 2027 National Expenditure Program as of this report; the House Speaker's office previously pledged a "transparent" budget process ahead of the Aug. 14 constitutional deadline for transmittal.
Context
The 2027 debt projection follows a year in which Philippine public debt repeatedly hit fresh records — from ₱18.49 trillion in March 2026 to a debt-to-GDP ratio described by government economists as the worst sustained level in two decades. Earlier Pulpulitiko reporting has tied the borrowing surge partly to the collapse in infrastructure disbursement following the 2025–2026 flood-control corruption scandal, which froze DPWH procurement and depressed capital spending even as the government continued borrowing to fund its development agenda. Oxford Economics has separately warned that the Philippines carries the widest fiscal deficit in ASEAN, with debt-service costs consuming more than 15 percent of government revenue.