Philippines ‘on track’ to hit deficit-to-GDP target

MANILA, Philippines — The government remains on track to meet its fiscal deficit target this year, with the deficit-to-gross domestic product (GDP) ratio projected at 5.45 percent for the full year, according to the Department of Finance (DOF).

Finance Secretary Frederick Go told a House of Representatives budget briefing that the agency sees the deficit-to-GDP ratio reaching 5.44 percent in the second half of 2026.

“(This would bring) the full year to 5.45 percent, our lowest deficit-to-GDP ratio since the start of the administration,” Go said.

“In the first half, our deficit-to-GDP ratio improved to 5.46 percent, compared to 5.65 percent in the same period last year and we remain on track to meet our fiscal deficit target for 2026,” he added.

A fiscal deficit is a shortfall in a government’s income vis-a-vis its spending.

Government revenues are projected to reach P4.81 trillion, while disbursements are pegged at P6.47 trillion in 2026.

“This continued reduction in the deficit is an important indicator that the fiscal discipline we are pursuing is translating into concrete results,’ he added.

The DOF projects the deficit-to-GDP ratio to decline to 3.5 percent by 2030, putting the country on a progressively stronger fiscal footing.

Go said that the country’s fiscal deficit share to the GDP has continued to narrow to 5.6 percent in 2025, lower than the 8.6 percent in 2021 and 7.3 percent in 2022.

“We continue to make progress this 2026 despite the economic shocks that we have faced, including those arising from the conflict in the Middle East,” he said.

By 2030, the DOF expects total revenues to exceed P6 trillion.

Go added that as the country manages its fiscal deficit responsibly, its debt levels remain sustainable.

In 2025, the national government (NG) debt stood at 63.2 percent of GDP, while the general government (GG) debt settled at 56.8 percent of GDP, well below the 70 percent international benchmark set by the World Bank for debt sustainability and within a manageable range compared to other emerging economies.

NG debt-to-GDP is projected to ease from 65 percent to 63 percent in 2030, while GG debt-to-GDP is expected to decline from 59 percent to 56 percent over the same period.