MANILA, Philippines — The Philippine national government’s outstanding debt reached a historic peak of P17.71 trillion at the end of 2025, according to the latest data from the Bureau of the Treasury (BTr) released on February 4, 2026.
This marks the third consecutive month that the country’s debt load has exceeded the Marcos administration’s full-year borrowing target of P17.36 trillion, reflecting a 10.32 percent increase from the P16.05 trillion recorded in 2024.
Factors Driving the Surge The BTr attributed the record-high figures to a combination of strategic and economic factors:
- Net Issuance: The government increased the issuance of debt instruments to fund essential development programs.
- Currency Valuation: The depreciation of the Philippine peso against the US dollar and other foreign currencies jacked up the value of external debt.
- Domestic Focus: Despite the increase, the debt profile remains largely domestic, with 68.4 percent (P12.12 trillion) sourced from the local market to minimize exposure to global exchange rate volatility.
Debt Sustainability Concerns The debt-to-GDP ratio—a key metric for a country’s ability to pay back what it owes—now stands at 63.2 percent.
- Above Threshold: This figure remains above the 60-percent international threshold and the Department of Finance’s earlier projection of 61.3 percent.
- Economic Headwinds: The rising ratio is exacerbated by the country’s cooling economy, which grew by only 4.4 percent in 2025, hampered by climate disruptions and a massive probe into infrastructure corruption.
- Expert Opinion: UnionBank Chief Economist Carlo Asuncion noted that while the debt is sustainable due to its long-term, fixed-rate nature, the government’s “fiscal space is tight,” and returning to below-60 percent will require faster economic growth and steady fiscal consolidation.
The Road Ahead The external debt component reached P5.59 trillion as of December. Moving forward, the government’s ability to manage this load will depend on whether it can successfully implement the P101-billion privatization plan for 2026 and if the central bank can stabilize the peso, which MUFG recently warned could slide toward 60:$1.
As the 2026 national budget deliberations continue, fiscal discipline and revenue generation remain at the forefront of the administration’s economic agenda.