Philippine debt swells to new high of P17.71T
The national government ended 2025 with its outstanding debt climbing to another fresh high, marking the third straight month it surpassed the Marcos administration’s full-year borrowing target.
Latest data from the Bureau of the Treasury (BTr) showed that the debt load as of end-December reached P17.71 trillion, 10.32 percent higher than the P16.05 trillion logged in 2024.
“The increase is due to the government’s strategic net issuance of debt instruments to fund development programs, as well as the valuation effects of peso depreciation against the US dollar and third currencies,” the BTr said in a statement.
The level is well above the full-year borrowing program of P17.36 trillion, but the BTr maintained that the government’s debt profile is still resilient and sustainable.
“Despite the higher debt level, the NG debt portfolio remained resilient with 68.4% of borrowings sourced domestically. By prioritizing peso-denominated financing, which is predominantly held domestically, the government reduces exposure to exchange rate volatility,” the BTr added.
In effect, the latest debt-to-GDP (gross domestic product) ratio, a gauge of the government’s ability to settle its liabilities, now stands at 63.2 percent, still above the 60-percent international threshold and the Department of Finance’s 61.3-percent projection.
But it matches the expectation that the ratio would reach 63 percent by year-end, as earlier noted by Senate finance committee chair Sherwin Gatchalian during the 2026 national budget hearing last November.
To put it into perspective, the high debt-to-GDP ratio comes after the disappointing economic growth of 3 percent in the fourth quarter of 2025, which brought the full-year growth to 4.4 percent.
Still sustainable
Carlo Asuncion, chief economist at UnionBank of the Philippines, echoed BTr’s view, saying that while the debt level is high, it remains sustainable, though fiscal space is tight.
”Debt sustainability is less about the headline level and more about the ratio, interest burden, and risk mix. The Philippines’ debt remains largely domestic, fixed‑rate, and longer‑dated, which helps,” he said.
“Still, with the debt‑to‑GDP ratio in the low‑60s and growth cooling in 2025, fiscal space is tight. The path back below 60% depends on faster growth, steady consolidation, and friendlier rates and FX,” he added.
Breaking down the total, domestic debt continued to account for the bulk of the load, rising 10.85 percent to P12.12 trillion.
Meanwhile, external borrowings reached P5.59 trillion.
