PH debt could breach 60% of its GDP this year

IMF urges targeted spending as rising debt and oil shocks tighten national budgets.

Government spending and borrowing could start to feel tighter for Filipinos, as the country’s rising debt may affect how public support is allocated among citizens.

The International Monetary Fund (IMF) expects the Philippines’ debt-to-gross domestic product (GDP) ratio to reach 60.2% this year, breaching a key threshold that signals reduced fiscal flexibility.

Total government debt already hit a record ₱17.71 trillion in 2025 and is now further pressured by global oil shocks as the country remains dependent on imported fuel. This means the government may scale back subsidies and instead focus on more targeted forms of aid.

The oil factor and growth downgrades

While the finance department assured the public of sufficient measures, economists warn that programs like transport or fuel assistance may become more selective, prioritizing sectors most affected by rising costs.

The IMF also downgraded its 2026 growth forecast for the Philippines, citing energy price volatility and slower public spending. It said the country may face greater difficulties if similar crises occur without stronger fiscal safeguards.

 

 

The safety net is tightening. As national debt breaches the 60% GDP threshold, the IMF warns that the Philippines must pivot to targeted spending.

 

 

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