Indentured

We need to talk about our nation’s debts. Urgently.

The past few years, the national debt has been growing much faster than the economy. We are not outgrowing the debt. We are burying ourselves in it.

As of June 2026, our total outstanding debt rose to an unprecedented P19.07 trillion, driven by higher domestic and external borrowings. At the year’s midpoint, we have exceeded the estimated indebtedness for the whole of 2026. This could not possibly be sustainable.

Year on year, our outstanding debt went up by 10.41 percent. As of the end of the first quarter 2026, the debt to GDP ratio was at 66.5 percent. This is even higher than the 62 percent posted during the worst of the Covid-19 pandemic.

In the first quarter 2026, our GDP grew by only 2.8 percent. This makes the growth of our outstanding debt even more dramatic.

The growth figures for the first half 2026 are due out this week. Private think tanks anticipate an even drearier picture. Our economy is barely expanding more than our population growth rate.

We are waiting for the administration to submit its National Expenditure Plan for 2027. With the economy basically stagnant and the outstanding debt exploding, we need to closely scrutinize this expenditure plan.

The slower growth of the economy will likely persist. This means that government revenues are not likely to rise significantly. A major portion of the proposed budget will rely on borrowed money even as debt servicing is already a heavy drag on our economic performance.

Given the alarming numbers, the bond market could be less interested in lending to government – unless investors are paid higher interest rates. Our technocrats are knocking on the doors of the multilateral financial institutions to access more funding. Given that public spending during this administration has been going to dole-outs rather than to solid projects that will improve our economic performance, there will be less enthusiasm over lending us any more money.

The Marcos II administration has not delivered for our economic modernization. It has used public funds to buy popularity through subsidy programs. It has no major infrastructure initiative. It has been timid in pushing substantive reforms.

At the same time, it is addicted to dole-outs as the means to shore up its sordid job approval ratings. In its remaining tenure, this tendency will drive the nation deeper into debt.

This makes the corruption scandal doubly more painful for our people. The money that was stolen was largely borrowed. We have become an indentured people.

Unneeded

The Supreme Court struck down Fisheries Administrative Order No. 266 (FAO 266). The order forced every commercial fishing vessel in the country to carry a real-time tracking device.

The requirement was justified as an environmental protection measure. The expensive device was supposed to help fight illegal, unreported and unregulated fishing in the country’s waters.The facts did not support the justification.

Under direct questioning from Chief Justice Alexander Gesmundo, then Solicitor General Menardo Guevarra conceded that the Vessel Monitoring System (VMS) cannot detect cyanide fishing or overfishing.

Guevarra likewise admitted the VMS produces essentially the same output as the manual catch reports fishing operators were actually filing – except that the former was filed in real time. The system, which adds to the costs of fishing, did not solve any problems. It only produced more paperwork and inflicted more costs borne by fishermen.

Government’s admission that the VMS did not produce any new useful information is damning. The project therefore failed what lawyers call “the rational basis test.”

In its ruling, the Supreme Court said “FAO No. 266 cannot pass the rational basis test for failing to meet the standard of reasonableness of the chosen means in connection with the interest sought to be protected by the State.” The order was struck down as unconstitutional.

A regulation that cannot outperform the system it replaced, while pressuring compliant businesses towards dishonesty, is not a reasonable means to a legitimate end. More, the Court concluded that the round-the-clock monitoring of fishing vessels serves no practical purpose.

Beyond the rational basis test, the Court also found that FAO 266 exceeded RA 8550 by demanding constant surveillance instead of mere tracking. The order also violated equal protection by ignoring municipal waters where illegal fishing is equally rampant. The order likewise ignored due process by relying on a dated Rome report instead of current local science.

Further compounding matters, a BFAR witness admitted during oral arguments that his agency had bought VMS hardware months before even holding public consultations for the regulation. That implied that the policy was imposed merely to justify a commercial transaction that was already completed.

The rule was not made to protect our fisheries but to justify a deal already sealed. This is exactly the P2.1-billion procurement that got two former BFAR directors – Eduardo Gingona and Demosthenes Escoto – criminally indicted for graft and administratively dismissed from government service. The ombudsman found the contract awarded to British firm SRT Marine Systems Solutions disadvantageous to government.

FAO 266, therefore, was from the start intended to justify a contract awarded without a guiding policy. This is not what evidence-based regulation looks like. It was procurement in search of a policy validate it. The contrived policy should not stand.

In this ruling, the Supreme Court continues on becoming a reliable guardian against fraud.