Colombia Budget Prioritizes Debt, Defense Over Peace

Colombia’s Congress approved a 634.9 trillion-peso budget for 2027, including 144 trillion pesos for debt servicing and 74.9 trillion pesos for defense. It also cuts funding for some institutions created to implement the peace agreement. The plan passed both chambers as the government faces a projected fiscal deficit of 9.4% of gross domestic product.

Debt and State Priorities

The De la Espriella administration proposed a budget totaling about US$201.1 billion. It marks the new government’s first major legislative victory, lifting spending from the 555.8 trillion pesos allocated for 2026. The total also exceeds by more than 10% the proposal submitted by former President Gustavo Petro’s administration, despite the new government’s pledge to reduce state spending.

Debt servicing takes 144 trillion pesos, approximately US$45.7 billion. Education receives 93 trillion pesos, or about US$29.5 billion, while health care gets 81.6 trillion pesos, approximately US$26 billion. Defense receives 74.9 trillion pesos, about US$23.8 billion. The report says the allocation reflects the administration’s focus on security and the state’s operational capabilities as it confronts illegal armed groups.

The Senate passed the bill late Monday night, with 57 votes in favor and two against. Early Tuesday, the House of Representatives approved it, with 112 votes in favor and one against. Both chambers approved matching versions after an extensive day of debate over the fiscal deficit and rising public debt.

Peace Institutions Face Cuts

Some institutions established to implement the 2016 peace agreement with the former Revolutionary Armed Forces of Colombia face funding reductions. These include the Special Jurisdiction for Peace, a transitional justice tribunal that investigates and prosecutes the most serious crimes committed during the armed conflict, and the Search Unit for Persons Presumed Missing.

The cuts prompted concerns about their effects on judicial investigations, searches for missing people and victim identification, including in international proceedings. Earlier in October, the United Nations called on Colombia to uphold its commitments under the peace agreement, reached 10 years ago.

The Historic Pact, former President Gustavo Petro’s political movement and the main opposition force, criticized cuts to education programs and public institutions. It specifically opposed reductions affecting the National Learning Service, which provides free technical training across the country. Lawmakers also debated how to distribute funds among subsidies, investment and institutional operating expenses.

Austerity and the Deficit

Finance Minister Miguel Gomez defended the budget 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 lawmakers, urging them to vote in favor.

The government estimates that the fiscal deficit could reach 9.4% of GDP in 2027, reflecting the gap between projected spending and revenue. Public debt keeps rising, and the government says Colombia needs to restore financial market confidence. The country lost its investment-grade credit rating in 2021, raising borrowing costs.

The administration has announced a fiscal reform called the Rescue Law, intended to reduce the projected deficit. The approved budget leaves questions about how the government will finance its priorities without increasing indebtedness or shifting the cost of adjustment onto public services and social programs.