De Leon: Gov’t can honor obligations without sacrificing investments in people, infrastructure, economy
The country’s debt remains manageable as the Marcos Administration continues to narrow the fiscal deficit while fully providing for debt servicing and protecting critical investments in infrastructure, human capital, and essential public services under the proposed FY 2027 National Budget, Department of Budget and Management (DBM) Acting Secretary Kim Robert C. De Leon said Monday.
Speaking before Congress during the Development Budget Coordination Committee (DBCC) briefing on the proposed P7.2-trillion FY 2027 National Expenditure Program (NEP), Acting Secretary De Leon stressed that the government is pursuing a disciplined but calibrated fiscal strategy—one that honors the country’s financial obligations without sacrificing investments necessary to sustain economic growth and improve the lives of Filipinos.
“The proposed FY 2027 budget reflects a disciplined spending strategy to sustain government operations, invest in long-term development, and fulfill our fiscal obligations,” Acting Secretary De Leon said.
2027 budget puts premium on long-term investments
The composition of the proposed P7.2-trillion budget reflects this strategy, with Capital Outlays posting the strongest growth among the major expenditure classes at 13.8 percent, even as Maintenance and Other Operating Expenses (MOOE) decline despite the overall 6.0-percent expansion of the National Budget.
Capital Outlays will increase by P140.8 billion to P1.160 trillion, providing greater resources for infrastructure, equipment, facilities, and other government assets that generate long-term economic and social benefits.
Personnel Services will receive P1.982 trillion, up by P138.2 billion or 7.5 percent, to support the public servants delivering education, healthcare, public safety, national defense, and other essential government services. The allocation also covers salary adjustments and other personnel requirements already committed by the government.
Meanwhile, MOOE is programmed at P2.944 trillion, 1.2 percent lower than its FY 2026 GAA level, underscoring efforts to contain operating expenditures even as the overall National Budget increases.
Financial Expenses amount to P1.114 trillion, an increase of P164.3 billion or 17.3 percent, primarily reflecting interest payments and the government’s commitment to fully honor its financial obligations.
Acting Secretary De Leon emphasized, however, that a higher interest bill should not be interpreted as evidence that the country’s public debt has become unmanageable.
“Our debt remains manageable, and debt servicing is explicitly provided for in the budget. At the same time, our medium-term fiscal program is designed to gradually narrow the deficit while protecting growth-enhancing and socially important expenditures,” Secretary De Leon added.
“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 Budget Secretary continued.
Fiscal consolidation delivering results
The Department of Finance (DOF) reinforced the DBM’s position, stressing that the Administration’s fiscal strategy is anchored on rebuilding fiscal space, steadily reducing the deficit, and maintaining debt at sustainable levels while supporting the country’s economic expansion.
“When the Marcos Jr. administration assumed office in 2022, it inherited a massive P12.79 trillion debt. The bulk of which was incurred from pandemic spending. So, when the economy began to recover, the challenge before the Administration was clear: to rebuild fiscal space, while continuing to support economic recovery and investing in the country’s long-term growth,” DOF Secretary Frederick D. Go noted.
The government expects its fiscal consolidation efforts to translate into a further reduction in the deficit in 2026.
“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. This continued reduction in the deficit is an important indicator that the fiscal discipline we are pursuing is translating into concrete results,” Secretary Go said.
“And because we continue to manage our fiscal deficit responsibly, our debt levels remain sustainable,” Secretary Go added.
The proposed FY 2027 National Budget therefore seeks to strike a deliberate balance: meet the government’s obligations today, steadily rebuild fiscal space, and preserve the investments needed to generate stronger and more inclusive growth in the years ahead. – DBM Release
The post DBM: PH debt manageable as gov’t cuts deficit, protects growth in proposed 2027 budget first appeared on Pampanga News Now.