Gov't urged to rein in spending, stick to fiscal plan amid debt concerns

THE PHILIPPINE government should stick to its fiscal consolidation plan and temper spending to ease fiscal strain, a congressional think tank said, warning that the country is “borrowing its way to growth.”

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In an August report, the Congressional Policy and Budget Research Department (CPBRD) said the government risks diverting more funds to debt servicing at the expense of public programs in the future if current spending levels persist.

The government's debt service program for this year is set at P2.051 trillion, based on the 2025 Budget of Expenditures and Sources of Financing.

“The Philippines is not outgrowing its debt,” the CPBRD said in a 24-page report by David Joseph Emmanuel Barua Yap, Jr., Jhoanne E. Aquino, and Rutcher M. Lacaza. “It appears to be borrowing its way to growth.”

“For every new peso of economic output, the government has added a proportional amount of debt, preventing the critical debt-to-GDP (gross domestic product) ratio from improving,” it added.