Philippine budget planners assume growth and currency conditions current data does not support

The Philippines is working to pass a PHP 7.2 trillion budget for 2027, a 6 percent increase over last year. The framework assumes GDP growth of 5 to 6 percent, the peso staying below 62 to the dollar, and oil under $90. Dubai Crude sits near $115, the peso trades at nearly 63, and the World Bank projects growth at 3.7 percent.

This is a recurring pattern. Planners assumed 6 to 7 percent growth for 2026; actual growth will likely fall below 4 percent. Revenue has underperformed forecasts in both 2025 and 2026, and the government has run deficits above 5 percent of GDP for several years.

Interest payments now consume 15 percent of spending, up from 10 percent in 2021. Infrastructure spending is set at PHP 832 billion — a 35 percent cut from 2024's peak, driven partly by last year's scandal-driven halving of the Department of Public Works budget. The military modernization plan aimed at countering China in the South China Sea received PHP 50 billion, far short of the pace its 10-year, $35 billion target requires.