The country’s debt remains manageable as the Marcos administration continues to narrow the fiscal deficit while protecting critical investments under the proposed 2027 national budget, the Department of Budget and Management (DBM) said Monday.
Speaking before Congress during the Development Budget Coordination Committee briefing on the proposed P7.2-trillion 2027 National Expenditure Program, DBM Acting Secretary Kim Robert C. De Leon said the government is pursuing a disciplined but calibrated fiscal strategy.
“The proposed FY 2027 budget reflects a disciplined spending strategy to sustain government operations, invest in long-term development and fulfill our fiscal obligations,” De Leon said.
Under the proposed budget, capital outlays will post the strongest growth among major expenditure classes at 13.8 percent, increasing by P140.8 billion to P1.160 trillion to provide more resources for infrastructure, equipment, facilities and other long-term assets.
Personnel Services will receive P1.982 trillion, up by P138.2 billion or 7.5 percent, to cover salary adjustments and support public servants delivering education, healthcare, public safety and national defense.
Meanwhile, Maintenance and Other Operating Expenses (MOOE) is programmed at P2.944 trillion, 1.2 percent lower than its 2026 level, reflecting efforts to contain operating expenditures despite the overall 6.0-percent expansion of the national budget.
Financial Expenses are set at P1.114 trillion, an increase of 17.3 percent due to interest payments. However, De Leon stressed that the higher interest bill does not mean public debt has become unmanageable.
“Our debt remains manageable and debt servicing is explicitly provided for in the budget,” De Leon said. “Our approach is therefore not to sacrifice growth simply to reduce the deficit overnight. We are pursuing a strategic and gradual fiscal consolidation path that allows us to honor our obligations, maintain fiscal credibility and continue investing in our people and our economy.”
The Department of Finance (DOF) backed the DBM’s position, noting that the administration has worked to rebuild fiscal space since inheriting a massive P12.79-trillion debt in 2022.
“We project a deficit-to-GDP ratio of 5.44% in the second half of 2026, bringing the full year to 5.45%, our lowest deficit-to-GDP ratio since the start of the Administration,” DOF Secretary Frederick D. Go said, adding that because the fiscal deficit is managed responsibly, debt levels remain sustainable.