More dividends by government corporations, privatization to reduce borrowings

The House of Representatives Committee on Appropriations continues deliberating on the national budget for 2026.

- Bienvenido S. Oplas Jr.

Spending is funded and limited based on (a) consistency with the Medium-Term Philippine Development Plan and (b) projected revenues and borrowings. Agencies cannot just propose a P10-trillion budget when the projected revenues are only P6 trillion, leaving a budget deficit of P4 trillion that requires borrowings of equivalent amounts. No, that is fiscally irresponsible, unsustainable and economically destructive.

From the Budget of Expenditures and Sources of Financing 2026 submitted by the Department of Budget and Management (DBM) and the Office of the President, proposed disbursements and spending will increase to P6.63 trillion in 2026 from P6.08 trillion in 2025. The projected revenues from taxes and non-taxes will also rise to P4.98 trillion next year from P4.52 trillion this year, so the projected budget deficit will rise to P1.65 trillion from P1.56 trillion this year. To help cover this deficit, net financing (gross borrowing minus amortization) will rise to P1.63 trillion next year from P1.39 trillion this year.

Huge borrowing means huge interest payment aside from huge principal amortization. In 2024, we paid interest payment alone – P763 billion or an average of P2.1 billion a day. Projected interest payment this year would be P848 billion or an average of P2.3 billion a day; next year, P950 billion or an average of P2.6 billion a day and in 2027, will breach the P1 trillion mark – huge.