UMVA has learned that the Philippine government’s latest development plan reveals a bold shift in fiscal strategy through 2028.
According to the updated midterm results, primary spending—government outlays after interest payments—is set to jump to 18.4% of GDP in 2026, up from an earlier estimate of 17.6%.
Officials anticipate a surge in disbursements this year, aiming to recover from last year’s underspending tied to an infrastructure scandal.
Yet the plan also sketches a gradual retreat, projecting primary expenditure to fall to 17.6% of GDP in 2027 and 17.3% by 2028.
In the first four months, primary spending rose 2.98% year‑on‑year to P1.66 trillion, while total outlays—including interest—reached P1.996 trillion, a 5.12% increase and 31% of the budget approved by the Development Budget Coordination Committee.
Revenue forecasts paint a similarly optimistic picture, with a revenue‑to‑GDP ratio slated at 16.2% in 2026, holding steady at 16% in 2027, and nudging up to 16.3% in 2028—slightly higher than earlier medium‑term projections.
Tax collections surged 9.99% in the same period, hitting P1.67 trillion and accounting for roughly a third of the year‑long P4.82 trillion program.
By 2028, tax revenue is expected to represent 15.5% of GDP, while value‑added tax receipts could climb to P24.4 billion.
On the deficit front, the national government’s fiscal gap is projected at 5.3% of GDP in 2026, easing to 4.8% in 2027 and 4.3% in 2028.
Debt dynamics remain a concern: the national debt‑to‑GDP ratio is forecast at 60‑63% in 2026, gradually slipping to the high‑50s by 2028, after peaking at 65.2% in the first quarter—the highest level since 2005.
Outstanding national debt rose 1.8% to P18.49 trillion at the end of March, up from P18.16 trillion a month earlier.
The broader government debt stock is expected to reach 55.6% of GDP this year, then modestly decline to 55.4% in 2027 and 54.7% in 2028, offering a more holistic view of the nation’s liabilities.
