Debt junkie rules Palace

Government borrowing to fund the ballooning annual budget directly affects the nation, as the rising debt service consumes resources that could otherwise be allocated to public services.

The sad reality, as recent developments indicated, is that much of the increasingly debt-funded budget ends up in the pockets of public officials.

The budget includes a unique feature for debt servicing, which is that principal amortization and interest payments on domestic and foreign public debt are treated as an automatic appropriation.

This means debt payments receive priority and are automatically allocated each year, without requiring annual congressional approval under the General Appropriations Act (GAA).

More than 30 percent of the annual budget is allocated to debt service.

The law states that expenditures for principal and interest on the public debt are “automatically appropriated,” ensuring that payments are made as they fall due.

Debt service receives the “first cut” of the budget, as it is funded first from available revenues, before allocations to agencies for programs such as education, health, infrastructure, or social services.

While the annual GAA covers most government spending, debt service falls under Special Purpose Funds or automatic appropriations. Interest payments are listed under the Debt Service Fund.

The Marcos administration, which has an increasing need to compromise for its political survival, has woven a web of fiscal dependency that’s ensnaring Filipinos.

Despite a vow of transparency and accountability, the 2026 national budget remains bloated with pork barrel allocations — those discretionary funds funneled to pet projects and political allies, often shrouded in secrecy and vulnerable to corruption.

The need for slush funds has the administration hooked on credit to sustain its spending spree.

In the Duterte era, the pandemic justified a borrowing binge that doubled the national debt in just three years, matching the total accumulated by all prior administrations.

The hope for post-crisis restraint vanished with the entry of the profligate Marcos administration, which has accelerated the borrowing.

The 2026 national budget of P6.7 trillion allocates P2 trillion solely to servicing loans.

The latest available data on the national government’s outstanding debt showed P17.56 trillion as of October 2025.

During the six-year term of president Rodrigo Duterte that was plagued by the Covid-19 pandemic in its last three years, borrowing averaged P1.222 trillion a year; whereas President Ferdinand Marcos Jr.’s administration in three years has averaged P1.255 trillion.

The pork barrel plays a starring role under Marcos, padding budgets with unnecessary expenditures that benefit political allies rather than the Filipino masses.

Corruption consumes a substantial portion of the annual allocations. Eliminate it, and the pernicious fiscal deficits might shrink dramatically, slashing the need to borrow.

Compounding the crisis is the peso’s weakness against the dollar, as many loans are dollar-denominated, thereby inflating repayment costs.

Economic slowdowns further erode revenue, necessitating additional borrowing to cover the shortfall.An economist said a self-perpetuating trap is thus created. As debt bloats, so does the slice of the budget devoured by its service, leaving scraps for infrastructure, agriculture, manufacturing and social services.

Debts aren’t owed by the President but are contracted in the name of the people, repaid through higher taxes that bite into meager incomes and curtailed public services that leave communities underserved.

Fewer schools mean uneducated children, fewer clinics and medicines spell needless suffering, neglected infrastructure crumble under typhoons and traffic.

Unborn generations will inherit this burden, their futures mortgaged to enrich today’s public officials who are driven by voracious greed.