Mounting interest costs pushed debt service bill to P2.1 trillion
The Marcos administration’s debt service burden climbed in 2025 as mounting interest costs pushed total repayments beyond the government’s program.
Data from the Bureau of the Treasury showed that the government spent a total of P2.1 trillion on debt servicing in 2025.
This was nearly 4 percent higher than the P2.02 trillion recorded in 2024. It amounted to nearly half of total revenues and 28.9 percent of total expenditures.
The 2025 total also exceeded the government’s P2.05-trillion program by 2.44 percent. This was largely due to interest payments jumping 11.8 percent to P854.1 billion.
Interest payments to creditors, both domestic and foreign, continued to take up a big slice of government revenues, accounting for 19.4 percent.
This was higher than the 17.3 percent in the previous year. As a share of expenditures, interest costs were 14.3 percent.
Of that amount, P634.8 billion went to domestic creditors, up 17.5 percent. Meanwhile, interest spending on foreign borrowings rose 2.6 percent to P228.3 billion.
Amortizations, meanwhile, cost P1.24 trillion, only 0.8 percent higher than 2024. However, the state paid 0.3 percent less to domestic creditors at P1.015 trillion, while P223.6 billion, or 6.5 percent lower, went to foreign creditors.
18.5% surge
Looking at the December figures alone, the state paid a total of P78.6 billion to creditors, up 18.5 percent on the back of a spike in amortizations.
Principal payments totaled P15 billion, about 80.7 percent higher than the P8.3 billion in the same period in 2024. Interest payments also climbed 9.8 percent to P57.9 billion.
For 2026, the Marcos administration has set a debt repayment program of P2 trillion, P950 billion for interest payments and P1.05 trillion for principal amortization.
Further, the borrowing program is P2.68 trillion, with P627.1 billion from external and P2.05 trillion from domestic creditors.
This is intended to cover a projected budget deficit of 1.65 trillion, equivalent to 5.3 percent of gross domestic product.
If realized, this will push the country’s total debt stock to over P19 trillion by the end of 2026.
