271059/271347/E-02472/E-04036 Representative Edcel C. Lagman, substituted by Albay First District Representative Krisel B. Lagman, et al. Vs. The Congress of the Philippines, et al./Aquilino “Koko” Pimentel III and Pantaleo “Bebot” Alvarez Vs. Lucas P. Bersamin, in his capacity as executive secretary, and Amenah F. Pangandaman, in her capacity as secretary of the Department of Budget and Management/Filipinos for Peace, Justice and Progress Movement, Inc. (FPJPM), represented by its president and chairperson, Joseph F. Cadsawan, and Gloria T. Puzon, chapter Officer Vs. The House of Representatives, et al./Edgar R. Erice and Leila De Lima Vs. The Senate of the Philippines, et al. — Official PDF

Decision 44 G.R. Nos. 271059, 271347, E-02472 and . --·~ • E-04036 • Debt-servicing-both interest and principal amortization payments- comes first ahead of national priorities, thus considerably narrowing fiscal space for the government's important projects and priorities such as public health and education. The table below shows that debt service occupied45% •of revenues in 2024 and 2025, and· is about· on.e-third of government expenditures: Total Debt Service· Interest+ Principal .. PHP billion 2023 2024 2025 rnrelim) '. •. •i: ,, Interest ( actual) PHP 628.3B PHP 763.3B PHP 864.IB Principal - PHP 822.5B PHP 1,018B PHP 1,015.4B Domestic217 Principal - PHP 121.IB PHP 239.3B PHP 223.7B Foreiim218 Total Debt Service PHP 1,571.9B PHP 2,020.6B PHP 2,103.lB • Total Revenues PI-IP 3,824.IB219 PI-IP 4 419B220 PI-IP 4,453.4B ' Total Expenditures PI-IP 5 336 2B221 PHP 5,925.4B222 PI-IP 6,030.3B • ' Total OS/Revenues 41.1% 45.7% 47.2% Total 29.5% 34.1% 34.9% DS/Exoenditures Therefore, Article VII, Section 22, read ,together with Article VI, Sections 25(1) and 29(1), are constitutional safeguards designed to ensure not only institutional accountability, but more importantly, fiscal disdpline. Spending must be controlled vis-a-vis revenues in light of its impact on debt level and interest payments, and on the countries' development objectives: Fiscal discipline requires that governments maintain fiscal positions that are consistent with macroeconomic stability and sustained economic growth. To this end, it waffants avoiding excessive borrowing and debt accumulation. At the same time, policy needs to be judicions in pursuing resource allocation and distributional objectives, and in smoothing output fluctuations. Moreover, it is prudent to create budgetary cushions to allow for the possibility of a response to both adverse shocks and to deal with predictable fiscal pressures, such as those arising from population aging. Maintaining fiscal discipline is essential to maintaining macroeconomic stability, reducing vulnerabilities, and improving aggregate economic performance. This is especially important if countries are to successfully meet the challenges, and reap the benefits, of economic and financial globalization. Fiscal discipline is essential if countries are to avail themselves of the opportunities offered by increasingly free trade and open capital markets, to enhance their longer-term economic prospects (see Hemming, Kell, and Mahfouz, 2002). But it is also necessary to reduce 217 Id. 21s Id 2'° 2025 BESF, Table A.2. no 2026 BESF, Table A.2. 221 2025 BESF, Table A.2. 222 2026 BESF, Table A.2.