I HAVE generally been optimistic about the Philippines, and there is much to feel positive about. We have a young and talented population that gives us tremendous long-term potential.
However, I am also starting to worry. As of July 31, national government debt has reached a record P19.39 trillion, including P6.28 trillion in foreign obligations. Part of the increase can be attributed to the weaker peso, which raises our foreign-currency debt.
Debt itself is not necessarily bad. Borrowing to make the economy more productive can benefit future generations — the same ones that will ultimately carry the burden of that debt.
The problem arises when we borrow without receiving the corresponding benefits. Recent events have made this painfully clear.
The government had spent enormous amounts of money on flood control projects, yet Filipinos continue to suffer during rainy season. Allegations involving anomalous, substandard and even nonexistent projects raise a disturbing question: What did taxpayers actually receive for the money the government borrowed and spent?
Every peso lost to corruption carries a double cost. We lose the money and do not benefit from the service it was supposed to provide.
Consider the social and economic costs of the latest round of floodings.
Meanwhile, legitimate government spending has slowed, creating another problem. With economic growth already weak, delays in productive public spending can further weigh on the economy. This creates a vicious cycle in which debt continues to accumulate, while a slower-growing economy is left to carry an increasingly heavy burden.
There is another reason rising debt worries me. We are steadily losing the freedom to choose how public money is spent.
The proposed 2027 national budget is P7.2 trillion. Yet, estimates indicate that roughly two-thirds of it is already committed to mandatory expenditures and prior obligations.
That leaves only about a third of the budget available for new and competing priorities, down from approximately 40 percent of the 2026 budget. This is what shrinking fiscal space looks like.
Personnel services alone will require almost P2 trillion in 2027, while financial expenses are projected at approximately P1.1 trillion. As the government borrows more, these expenses will rise, particularly amid higher interest rates and a weaker peso. As these commitments grow, each succeeding budget will have less flexibility.
This is why the 2027 national budget could be one of the most consequential budgets in recent years. Congress must pass a sound budget that directs our scarce fiscal resources toward programs and projects that genuinely create economic and social value. We cannot afford projects driven primarily by political influence rather than national priorities.
The government must then implement that budget. Fighting corruption cannot become an excuse for paralysis. Projects must be properly reviewed and then carried out quickly and effectively. An economy suffering from weak investment cannot afford a government that is afraid to spend.
We cannot fight corruption by refusing to spend, just as we cannot accelerate spending by tolerating corruption. The government must do both: spend effectively and spend honestly.
I remain optimistic about the Philippines. I believe in the ability of our people, businesses and institutions to overcome difficult periods. But optimism cannot mean ignoring warning signs, and it certainly cannot become an excuse for accepting poor governance.
With national debt approaching P20 trillion, our room for error is small. If debt continues to rise faster than the economy can grow, while corruption prevents borrowed money from being turned into productive assets, future budgets will be devoted to paying for decisions already made, rather than investing in the choices still open to us.
I have said that while projects may be ghosts, debt is real. That debt becomes more real every day, with the bills’ due dates coming.
We should not accept that future.
Pass the right budget, protect every peso, and implement it well, so the economy can grow. We still have time to change our trajectory, but we cannot afford to waste either our money or our time.
Our people deserve better.