Philippines to borrow up to P1.7 trillion in 2027 as budget gap widens, DBM says

Abi Sarabia M., Philippine Canadian Inquirer
August 12, 2026

Photo courtesy: Presidential Communication Office

The Philippine government expects to borrow as much as P1.7 trillion in 2027 to cover a projected budget shortfall, even as it proposes a lower allocation for confidential and intelligence funds compared to this year, the Department of Budget and Management (DBM) said.

Acting Budget Secretary Kim Robert de Leon said the shortfall will be financed through a mix of domestic and foreign borrowing, with domestic sources expected to account for the larger share.

“Ang kaukulang resulting budget deficit ay 1.7 trillion which will be financed through borrowings. This is equivalent to almost 25% of the total program disbursements of the government,” de Leon said. 

“At itong borrowings naman natin, consistently it’s a mix between foreign and domestic borrowing.”

The proposed 2027 national budget, reflected in the National Expenditure Program (NEP), stands at P7.2 trillion. However, the DBM said not all of this amount is expected to be actually disbursed within the year. 

Based on the department’s calculations, actual government disbursements for 2027 are projected at P6.9 trillion, against anticipated total government revenue of only P5.2 trillion, resulting in the P1.7-trillion deficit.

The borrowing plan comes as the country’s total outstanding debt already exceeds P19 trillion as of June 2026, according to the report.

The 2027 budget proposal includes P10.77 billion in combined confidential and intelligence funds, lower by 8.8 percent compared to the P11.818 billion approved under the 2026 General Appropriations Act (GAA).

Of the proposed amount, P4.368 billion is allocated for confidential funds and P6.405 billion for intelligence funds, the DBM said.

The department emphasized that only government agencies legally authorized to carry out confidential and intelligence functions may be granted access to these funds.

“We wish to reiterate that the use of confidential and intelligence funds remains subject to existing budgeting, utilization, liquidation, and auditing rules to ensure accountability and that the funds are used solely for their intended purposes,” de Leon said.

Budget deliberations on the proposed 2027 national spending plan are expected to begin in the House of Representatives on August 17, followed by the Senate on August 27. 

Both chambers are set to open their respective hearings with the Development Budget Coordination Committee (DBCC).