By Aubrey Rose A. Inosante, <\/b>Reporter<\/i><\/p>\n
THE NATIONAL Government\u2019s <\/span>(NG) total debt is anticipated to surge to a historic P19.06 trillion by the conclusion of 2026, as per a document from the Department of Budget and Management (DBM) released <\/span>on Wednesday.<\/p>\n This comes as the government intends to raise P2.68 trillion next year to finance the national budget. <\/span><\/p>\n The 2026 Budget of Expenditures and Sources of Financing indicated that the NG\u2019s debt stock is predicted to rise by 9.78% from the revised P17.36-trillion estimate for the end of 2025.<\/p>\n Of the overall amount, domestic debt is projected to increase by 10.27% to P13.28 trillion by the end of 2026, up from the anticipated P12.04 trillion by the close of 2025.<\/span><\/p>\n Outstanding external debt is also expected to climb by 8.67% to P5.78 trillion by the end of 2026 from P5.31 trillion by the end of 2025.<\/p>\n Finance Secretary Ralph G. Recto informed BusinessWorld<\/i> that the NG debt remains manageable, emphasizing that the economy will be roughly valued at P31.8 trillion by 2026.<\/p>\n As of June, the Philippines\u2019 sovereign debt reached a new height of P17.27 trillion, rising 11.5% from P15.48 trillion during the same month in 2024.<\/p>\n This elevated the debt-to-gross domestic product (GDP) ratio to 63.1% at the close of June, marking the highest ratio since 2005. This surpasses the 60% debt-to-GDP limit regarded by multilateral lenders as sustainable for developing nations.<\/p>\n \u201cIt\u2019s still aligned with our MTFF (Medium Term Fiscal Framework). However, we aim for at least 60%, which is the international benchmark,\u201d<\/p>\n Budget Secretary Amenah F. Pangandaman stated to journalists on the sidelines of the 2026 National Expenditure Program turnover at the House of Representatives. <\/span><\/p>\n \u201cIdeally, we can achieve that or possibly even reduce it to around 59% or 58%,\u201d Ms. Pangandaman added.<\/p>\n The DBM indicated that the debt-to-GDP ratio is now expected to settle at 61.3% by the conclusion of 2025, slightly above the former target of 60.4%.<\/p>\n By the end of 2026, the debt-to-GDP ratio is projected to rise to 61.8%.<\/span><\/p>\n Budget Assistant Secretary Romeo Matthew T. Balanquit mentioned that the elevated forecasts for the debt-to-GDP ratio account for slower economic growth expectations.<\/p>\n In June, economic managers narrowed the GDP growth target range to 5.5-6.5% this year from the earlier target of 6-8%, \u201creflecting a more cautious and resilient outlook amidst global challenges.\u201d<\/span><\/p>\n The growth target was also reduced to 6-7% for 2026 to 2028 from 6-8% previously. <\/span><\/p>\n Mr. Balanquit stated that the substantial debt was incurred by the government during the coronavirus disease 2019 (COVID-19) pandemic. <\/span><\/p>\n \u201cWe are honoring our debts from the pandemic period. It is crucial to enhance our interest payments. However, the positive aspect is that interest rates are actually declining,\u201d he noted.<\/span><\/p>\n \u201cWe will also observe that borrowing costs will lessen over the upcoming years. Admittedly, our interest payments are on the rise,\u201d he added.<\/p>\n BORROWING PROGRAM Mr. Balanquit indicated that the borrowing composition maintains an 80:20 ratio favoring domestic sources to mitigate risks from external shocks.<\/p>\n Gross domestic borrowings are established at P2.05 trillion for 2026, 2.7% above the P2.11-trillion program in 2025. This includes P1.99 trillion in fixed-rate Treasury bonds and P60 billion in Treasury bills.<\/p>\n Conversely, gross external borrowings have been set at P627.1 billion for next year, an increase of 28.46% compared to this year’s P488.17 billion.<\/p>\n This incorporates P302.100 billion in bonds and various inflows, P263.29 billion in program loans, and P61.71 billion in project loans.<\/p>\n Simultaneously, the debt service obligation is projected at P2.01 trillion in 2026, a decrease of 2.36% from this year\u2019s P2.05 trillion.<\/p>\n The government stated it will allocate P1.06 trillion for principal repayments next year, a 12.48% reduction from P1.21 trillion in 2025.<\/p>\n For interest disbursements, the government has earmarked P950 billion, a 12% drop from P848 billion this year.<\/p>\n
\n<\/b>Meanwhile, the government\u2019s borrowing initiative for 2026 is set at P2.68 trillion, reflecting an increase of 3.15% from this year\u2019s P2.6 trillion.<\/p>\n