The Philippines is expected to continue running fiscal and current account deficits through 2028, according to a report from BusinessWorld. The deficits are projected to persist as the government maintains spending to support the domestic private sector.
In a paper titled "Lessons from Sectoral Financial Balances for Philippine Crises," economists from De La Salle University warned that sustained government expenditure will be necessary to keep the private sector in surplus and avert a financial crisis. The analysis highlights the interplay between fiscal, current account, and private sector balances.
The findings underscore the challenges facing the Philippine economy, where ongoing deficits require careful management of fiscal policy to maintain stability. The paper's insights come amid broader discussions on the country's economic trajectory and the role of government spending in supporting growth.