Colombia Budget Trims Peace Bodies as Debt Costs Soar

Colombia’s Congress approved a 634.9 trillion peso budget for 2027 in the early hours of Tuesday, Oct. 20. Debt takes the largest share—not schools, clinics or soldiers. The plan sets aside 144 trillion pesos, about US$45.7 billion, just to service what the country already owes, even as institutions built to deliver justice to victims of the armed conflict face cuts.

Worth about US$201.1 billion, the spending plan marks the De la Espriella administration’s first major legislative victory. The Senate passed it late Monday night by a vote of 57 to 2. In the early hours of Tuesday, the House followed, voting 112 to 1. Both chambers approved matching versions after a long day of debate, shadowed by concerns about the fiscal deficit and rising public debt.

Who Pays for the Adjustment

The new budget grows rather than shrinks. It rises from the 555.8 trillion pesos, roughly US$176.5 billion, allocated for 2026, and exceeds by more than 10% the proposal submitted by former President Gustavo Petro’s administration. That increase comes despite the new government’s pledge to reduce state spending.

Yet cuts fall on particular institutions. Those created to carry out the 2016 peace agreement with the former FARC face reduced funding. They include the Special Jurisdiction for Peace (JEP), the transitional justice tribunal that investigates and prosecutes the armed conflict’s most serious crimes, and the Search Unit for Persons Presumed Missing (UBPD). The reductions prompted concerns about judicial investigations, searches for missing people and the identification of victims, including in international proceedings.

The timing adds to the concern. Earlier this month, the United Nations urged Colombia to uphold its commitments under the peace agreement, now a decade old.

Opposition Pushes Back

The Historic Pact, Petro’s political movement and the main opposition force, criticized cuts to education programs and public institutions. One target is the National Learning Service (SENA), which provides free technical training across the country. Lawmakers also debated how to divide funds among subsidies, investment and the operating expenses of various institutions.

Education still gets 93 trillion pesos, about US$29.5 billion, while health care receives 81.6 trillion pesos, about US$26 billion. Defense gets 74.9 trillion pesos, about US$23.8 billion. The report says that allocation reflects the administration’s priority on security and the state’s ability to confront illegal armed groups.

The Government’s Case

Finance Minister Miguel Gomez defended the bill and thanked lawmakers for backing it. “The budget recognizes the revenue the country can collect and incorporates cuts to address the fiscal imbalance. Debt absorbs resources that are needed for investment: correcting course requires austerity and greater efficiency in public spending,” he told legislators while urging them to vote yes.

The figures behind his argument are stark. The government estimates the fiscal deficit could reach 9.4% of gross domestic product in 2027. Public debt keeps climbing, and Colombia needs to restore confidence in financial markets. The country lost its investment-grade credit rating in 2021, five years ago, raising its borrowing costs. The administration has announced a fiscal reform called the Rescue Law, designed to shrink the projected deficit.

The approved distribution, the report said, tries to balance executive priorities with legal obligations and spending commitments. But the bill doesn’t resolve how the government will pay for those priorities without piling on more debt or shifting adjustment costs onto public services and social programs.

Why This Matters: A budget shows whom a government protects first, and Colombia’s 2027 plan puts creditors and security ahead of the institutions dealing with the war’s unfinished business. Cuts to the JEP and the missing-persons unit could slow efforts to establish the truth for families still searching for relatives, just as the UN has urged Colombia to honor the peace agreement. Education cuts, including those affecting SENA’s free technical training, would hit hardest among people who depend on public programs for a path to work. Debt servicing now exceeds every other category, while the deficit is projected at 9.4% of GDP. The test is whether the promised Rescue Law spreads the burden fairly or leaves it with those least able to absorb it.