Libanan: Debt payments to eat up P2.7 trillion in 2027

The government is set to pay P2.7 trillion for interest and principal amortization on its debts, or roughly P52 for every P100 of projected government revenue in 2027.

House Minority Leader Marcelino Libanan, in his Turno En Contra speech during the plenary session of the House of Representatives on Friday, said the government expects P5.2 trillion in revenues in 2027, way below the proposed P7.2 trillion national budget.

Turno En Contra is traditionally given to the House minority bloc to encapsulate its position on the proposed national budget.

Libanan reminded Congress of the role of the minority bloc, which is to fiscalize, “to scrutinize expenditures, test assumptions, demand accountability, and point out matters that might otherwise escape attention.”

“Majority and Minority may disagree on particular items, but ultimately, we share the same responsibility: to make sure that the people’s money is spent properly,” he said.

Libanan said that for 2027, interest payments on debts alone will reach approximately P1.114 trillion, while principal amortization is about P1.59 trillion.

“Principal payments are financing transactions and are, strictly speaking, not part of the P7.2-trillion expenditure program. But they remain actual obligations of the Treasury,” he said.

“Taken together, debt service reaches approximately P2.7 trillion—equivalent to almost P52 for every P100 of projected government revenue,” he added.

From the national budget, he said the government must provide for the National Tax Allotment, salaries, pensions, statutory contributions, and other mandatory expenditures.

“So while we speak of a P7.2-trillion budget, the amount over which government actually has room to make new choices is much smaller, in the amount of P2.60 trillion, about 36 percent of the P7.2 trillion budget,” Libanan said.

“Kung ganun, pagkatapos bayaran ang utang at ang mga obligasyong hindi maaaring ipagpaliban, mas maliit ang perang tunay nating mapagpapasyahan,” he added.

Libanan said the pressure on fiscal space can be illustrated by the budget allocation for education.

He said the P1.114 trillion in interest payments alone is P138 billion higher than the P976 billion proposed budget for the entire Department of Education.

Education-sector spending is approximately 3.99 percent of GDP, compared with roughly 4.36 percent under the FY 2026 General Appropriations Act (GAA), which, he said, will keep the classroom shortage substantial.