Accountant’s take on the huge national debt
- Leomar Cabarles
- Dec 10, 2025
- 3 min read
AS of October, the national government’s debt stood at P17.56 trillion, a worrisome development in the country’s long-term economic health. The surge was driven not only by continued borrowing, but also by the peso’s depreciation against the US dollar.
From an accountant’s vantage point, the current trajectory raises urgent questions about fiscal sustainability, economic stability, and public welfare.
A huge national debt translates into real consequences for government capacity, public services, and economic resilience. A weak peso inflates the peso-value of foreign-denominated debts, making repayments heavier.
If the government continues to borrow and the peso remains volatile, interest payments and debt servicing could consume a larger portion of public funds. This means squeezing budgets for infrastructure, social services, health care, education, and other development priorities that many Filipinos rely on, especially the most vulnerable.
In accounting, this kind of trajectory demands vigilance. Without prudent fiscal management, debt can become a drag on growth, burdensome for future generations, and a risk to macroeconomic stability.
In such a situation, accountants — both in government and private sectors — are more than number-keepers. They are guardians of financial integrity, tasked with assessing risk, forecasting liabilities, and advising on sustainable fiscal practices.
They can:
Advocate fiscal transparency and prudent borrowing: scrutinize new debt, insist on clear justifications and realistic repayment plans, and alert stakeholders when economic assumptions are overly optimistic.
Perform rigorous, scenario-based stress testing: model what happens under various currency, interest-rate, and growth scenarios; project whether debts remain manageable under stress.
Support efficient public spending and accountability: help ensure funds borrowed are used wisely, delivering real value, not wasted in inefficiency or corruption.
Educate stakeholders on long-term impact of debt levels: from lawmakers to the public, making sure citizens understand what high debt could mean for future taxes, inflation, or public services.
In short, accounting isn’t just about closing books. In a time of rising debt and economic uncertainty, it becomes a cornerstone of responsible governance and sustainable growth.
Risk factors
Several risk factors are heightening the challenge:
Currency depreciation continues to inflate foreign-currency denominated obligations, pushing up debt service costs.
Global economic headwinds (uncertain interest rates, global inflation, commodity price swings) may limit foreign investment and remittances, reducing foreign-exchange inflows that help stabilize the peso.
Slower economic growth could weaken revenue collection for the government, just as debt servicing demands increase. If GDP growth stalls, the debt-to-GDP ratio becomes increasingly concerning.
Servicing debt may limit funds available for social services, infrastructure, and development investments crucial for long-term economic growth and social well-being.
If these risks are not managed carefully, debt could become a heavy burden, undermining public trust and economic progress.
Urgent priorities
These are urgent priorities to steer the country back to a sustainable path:
Prudent borrowing: incur debt only when proceeds fund productive investments (infrastructure, social services, economic-growth enabling projects), not for short-term or non-strategic expenses.
Currency-aware debt management: prioritize peso-denominated debt where possible; when borrowing in foreign currency is unavoidable, create hedging strategies and realistic exchange-rate assumptions.
Transparent reporting and public accountability: publish clear and comprehensible reports on debt composition, uses, and servicing costs; make them accessible to public scrutiny.
Stronger oversight and auditing standards: ensure borrowed funds are used efficiently and effectively, with robust internal controls and regular independent audits.
Investment in revenue-generating growth: support sectors and projects that promote higher GDP, job creation, export earning, and forex inflows — helping the country pay back debt sustainably.
Commitment
It is possible for the country to navigate this challenge responsibly, but only if there’s collective commitment from government, civil society, and private sector. The rising P17.56 trillion debt should not automatically cause panic, but it demands fiscal responsibility.
As an accountant committed to the country’s long-term welfare, I believe my profession has a crucial role in safeguarding economic stability today and for future generations through prudent debt management, transparent reporting, and fiscal discipline.
The numbers may look daunting now. But with responsible action and commitment, they don’t have to define our future.
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Leomar R. Cabarles, CPA, is an audit and consulting partner in AMYu & Associates, CPAs.
