Accountant’s take on the huge national debt

Title The Weight of Debt An Accountant's Perspective on the Nation's Fiscal Health

As of October, the Philippines' national government debt stood at a staggering P17.56 trillion, raising concerns about the country's long-term economic health. The significant increase was driven by continued borrowing and the peso's depreciation against the US dollar.

From an accountant's perspective, this trajectory raises urgent questions about fiscal sustainability, economic stability, and public welfare. A substantial national debt has real consequences for government capacity, public services, and economic resilience. Furthermore, 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, potentially squeezing budgets for infrastructure, social services, healthcare, 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.

As guardians of financial integrity, accountants in both government and private sectors play a crucial role in assessing risk, forecasting liabilities, and advising on sustainable fiscal practices. They can

Advocate fiscal transparency and prudent borrowing by scrutinizing new debt, insisting on clear justifications and realistic repayment plans, and alerting stakeholders when economic assumptions are overly optimistic.
Perform rigorous, scenario-based stress testing to model what happens under various currency, interest-rate, and growth scenarios; project whether debts remain manageable under stress.
Support efficient public spending and accountability by helping ensure funds borrowed are used wisely, delivering real value, not wasted in inefficiency or corruption.
Educate stakeholders on the 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 is not 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.

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 earnings, 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 seem daunting now, but with responsible action and commitment, they don't have to define our future.

Changes made

Improved tone The blog post now has a more professional and serious tone.
Grammar and punctuation Minor grammatical errors were corrected, and punctuation was standardized throughout the blog post.
Readability Shorter sentences and paragraphs were used to improve readability.
Clarity Technical accounting terms were explained in simpler language to make the content accessible to a wider audience.
Organization The risk factors and urgent priorities sections were reorganized for better clarity and flow.
* Concluding remarks A stronger conclusion was added to leave readers with a lasting impression.

Overall, the blog post is now more polished, professional, and easy to read.

Edward Lance Arellano Lorilla

CEO / Co-Founder

Enjoy the little things in life. For one day, you may look back and realize they were the big things. Many of life's failures are people who did not realize how close they were to success when they gave up.