Philippines faces rising debt load as borrowing costs climb and growth slows

Manila reports that the national debt will continue to climb, hitting a historic high by the close of 2027. The debt-to-GDP ratio is projected to hover near the mid-60 percent mark before a modest decline is expected later in the decade. Deficits remain above five percent of GDP, and interest outlays are forecast to rise markedly, accounting for a sizable portion of the upcoming budget.

The finance ministry emphasizes that most debt is domestic, fixed-rate and long-term, which buffers against sudden global rate spikes, though a sizable foreign-currency component remains vulnerable to peso depreciation. Lawmakers warn that expanding interest obligations could crowd out spending on health, education and other public services. The government’s strategy hinges on reviving economic growth to outpace debt accumulation and tightening fiscal discipline.