Philippines debt overshoots forecast, hits P17.6 trillion

MANILA, Philippines, September 5 ------ The country’s outstanding debt breached the total full-year debt expectation for this year by over P200 billion, amid support for key infrastructure and development initiatives.

Based on the latest data from the Bureau of the Treasury (BTr), the national government’s outstanding debt slightly inched up by 1.7 percent to a record high of P17.56 trillion as of end-July from P17.27 trillion as of end-June. While the increase against the total debt expectation is only 1.21 percent, it is equivalent to P210 billion and is above the full-year assumption of P17.35 trillion.

The said amount is also 11.9 percent higher than the P15.69 trillion recorded in the same period last year. “The national government’s outstanding debt of P17.56 trillion as of end-July 2025 is expected to decline toward the year-end as the Treasury pays off P814.2 billion worth of domestic bonds by December 2025 and fundraising activities wind down,” the Treasury said.

In a bid to reduce exposure to foreign exchange risks, the government leaned on domestic borrowings to further develop the local capital market. The debt stock was mainly funded through domestic borrowings at 76 percent, while external borrowings accounted for 24 percent for the seven-month period this year. BTr data showed that the total domestic debt level reached P12.11 trillion, slightly up by 1.3 percent from P11.95 trillion in June. Meanwhile, total external debt for July increased by 2.6 percent to P5.5 trillion from P5.32 trillion the previous month. “The national government’s borrowings are used to support key infrastructure and development initiatives in education, health care, agriculture and social services, among other priorities,” the Treasury said.

External debt securities widened by 2.7 percent to P2.79 trillion compared to a month ago, while domestic debt securities rose by 1.3 percent to nearly P12.1 trillion month-on-month. The Treasury stressed that it is following the medium-term fiscal program to stay aligned with its goals, highlighting its commitment to fiscal discipline and long-term debt sustainability. 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 P17.35 trillion this year.

Source: philstar.com