The Philippines plans to borrow US$54 billion in 2027 to revive growth
The proposed debt accounts for 46% of 2027’s national budget
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THE Philippine government plans to borrow 3.3 trillion pesos (US$54 billion) next year, up by a fifth, as it seeks to revitalise an economy rocked by the conflict in the Middle East and a corruption scandal.
The proposed debt, mostly to be raised domestically, would account for 46 per cent of 2027’s national budget of 7.2 trillion pesos, data from the Department of Budget and Management showed on Tuesday (Aug 11).
It would be 20 per cent higher than 2026’s revised borrowing plan of 2.73 trillion pesos.
The South-east Asian nation has raised its budget deficit-to-gross domestic product ratio to 5.1 per cent for next year, up from the 4.8 per cent previous target as it seeks to spend more to support growth.
Its outstanding debt stood at 19.07 trillion pesos as at June, roughly 66 per cent of GDP.
President Ferdinand Marcos Jr said 2027’s budget focuses on reforms aimed at long-term development.
“Amid continuing global uncertainties – including geopolitical tensions, persistent inflationary pressures, and volatile energy prices – we remain steadfast in pursuing growth that is both resilient and fiscally responsible,” Marcos said in his budget message.
The borrowing plan will be tracked closely by international investors, many of whom are jittery about emerging markets that are vulnerable to oil price shocks.
The government is planning to raise so-called sin taxes on soft drinks, e-cigarettes and alcohol, to help pay for stimulus measures Marcos revealed during his State of the Nation Address in July.
Marcos announced tax relief for households and subsidies to counter the impact of energy-price spikes on a nation that gets more than 90 per cent of its oil from the Middle East.
Fallout from the Iran War hit an economy that had already stuttered as a public works graft scandal led to a collapse in state, business and personal spending.
The government is looking to raise 915 billion pesos from foreign creditors, including multilateral lenders like World Bank and Asian Development Bank, up from an estimated 815.5 billion pesos in 2026.
Of that amount, 366 billion pesos will be sourced from the international bond market, compared with 314.4 billion pesos this year. It has already raised US$5.25 billion in global bonds so far in 2026.
Domestic borrowings planned for 2027 total 2.39 trillion pesos, up 24 per cent from 1.92 trillion pesos this year and should account for about 72 per cent of total debt.
Philippine local bonds are among the biggest losers in emerging markets this year, handing US dollar-based investors a 5 per cent loss on a hedged basis. The peso has dropped 3.7 per cent.
The South-east Asian nation’s proposed budget for 2027 is 6 per cent higher than this year’s allocation of 6.79 trillion pesos. It plans a budget deficit of 1.69 trillion pesos for 2027, wider than the revised ceiling of 1.66 trillion pesos in 2026.
“This budget prioritises the provision of support to our country’s economic growth through strategic investments in infrastructure, education, health, food security, and social protection,” Budget Secretary Kim Robert de Leon said when his department submitted the budget plan to Congress on Tuesday. BLOOMBERG
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