Government debt eases to P17.5 trillion in end-August

MANILA, Philippines, October 4 ------ The Philippines outstanding debt declined in August after the government fully settled its largest local bond for the year and benefited from a stronger peso, reflecting improved fiscal management and efforts to reduce borrowing obligations.

Based on the latest data from the Bureau of the Treasury (BTr), the national government’s outstanding debt slightly diminished by half a percentage point to record P17.47 trillion as of end-August from P17.56 trillion as of end-July. “This was mainly due to the government’s full repayment of its biggest local bond for the year, worth P516.34 billion, and a stronger peso, which reduced the value of the country’s external debt,” the BTr said.

The foreign exchange rate used is 57.042 per dollar, lower than the rate used in July at 58.186. While the government debt experienced a decline, it is P120 billion above the 2025 ceiling of P17.35 trillion. Compared to the debt level in August last year of P15.55 trillion, the latest figure is 12 percent higher. “The debt reduction was accompanied by an improvement in the country’s debt profile as the share of domestic debt to total borrowings increased to 69.2 percent from 68.9 percent in the previous month,” the Treasury said. It added that the decline in the country’s debt profile appeared more favorable, as domestic obligations are less susceptible to fluctuations in foreign exchange rates compared with external borrowings.

BTr data showed that the domestic debt level declined to P12.09 trillion by less than a percentage from July’s P12.11 trillion. Meanwhile, total external debt for August also eased to P5.38 trillion from P5.45 trillion in the previous month, which represents a 1.4 percent decline. External debt securities contracted in August by 1.7 percent to P2.74 trillion compared to a month ago, while domestic debt securities dipped by 20-basis-points to P12.09 trillion month-on-month. For the last quarter of this year, the national government will borrow P437 billion through short-term bills and long-term bonds. Still, it is 36.7 percent lower than the P690 billion programmed in the previous quarter.

The government will auction P262 billion in Treasury bills while also raising P175 billion from Treasury bonds. According to the Budget of Expenditures and Sources of Financing for fiscal year 2026, the national debt is expected to rise by 9.8 percent to P19.06 trillion from the P17.35 trillion target this year.

Source: philstar.com