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Philippine inflation accelerated to its fastest pace in nearly a year in January amid a faster rise in rents and electricity rates, the Philippine Statistics Authority (PSA) reported. 

Headline inflation picked up to 2% from 1.8% in December but slowed from 2.9% in the same month last year.   

This was the fastest pace seen in 11 months or since 2.1% in February 2025.

It also marked the first time in almost a year that the consumer price index (CPI) hit the Bangko Sentral ng Pilipinas’ (BSP) 2%-4% target. 

The January clip was likewise above the 1.8% median forecast in a BusinessWorld poll of 18 economists but was within the central bank’s 1.4%-2.2% estimate for the month. 

“The main reason for the higher inflation rate in January 2026 compared with December 2025 is the faster price increase in housing, water, electricity, gas, and other fuels, which recorded a 3.3% inflation rate,” National Statistician Claire Dennis S. Mapa said at a news briefing on Thursday. 

Inflation for housing, water, electricity, gas and other fuels quickened to 3.3%, the fastest since 3.8% in August 2024.

According to the PSA, this commodity group had a 45.9% share in the overall inflation uptick in January.

Broken down, inflation for electricity rose to 6.5% year on year in January from the revised 4% in December, while rental prices picked up by 2.9% during the month from 2.4% in December.

This comes even after Manila Electric. Co. trimmed electricity rates by 16.37 centavos per kilowatt-hour (kWh) to PHP 12.9508 per kWh last month from PHP 13.1145 per kWh in December, which meant households consuming an average of 200 kWh paid PHP 33 less in their monthly electricity bill.

In January 2025, Meralco charged PHP 11.7428 per kWh.

The Department of Economy, Planning, and Development (DEPDev) said the government is enforcing programs to manage price pressures emerging from the energy sector. It includes improving the Department of Energy’s Net Metering Program by enforcing time-bound local permitting, simplifying utility documentary requirements and expanding consumer incentives.   

“The program allows consumers to install eligible renewable energy systems and export surplus electricity to the grid, helping lower electricity costs and support the energy transition,” the DEPDev said in a statement.

Mr. Mapa also noted that liquefied petroleum gas (LPG) added price pressures, as inflation settled at -2.8% in January from -5.1% in December.

In January, Petron Corp. hiked LPG prices by PHP 2.18 per kilogram (kg), while Solane imposed a P2.18-per-kg increase.

This means that the price of a household-standard 11-kg LPG tank ranged from P820 to P1,120 last month, based on data from the Department of Energy.   

Meanwhile, Mr. Mapa noted that lessors often begin implementing rental rate adjustments in the first month of the year, which likely propped up rental inflation in January.

“Our reading is that January marks the start of the yearly rental adjustments,” he said in mixed Filipino and English, adding there could be further increases in February and March.

Faster restaurant inflation

Meanwhile, faster electricity and rental rates drove up inflation for restaurants and accommodation services to 4% in January from 2.4% in December. This was the fastest clip since the 4.1% in September 2024.

For restaurants, cafés and the like, inflation picked up to 4.1% in January, from 2.6% in December.

“Energy prices are also rising because, of course, you’re using electricity — maybe rent, since rental prices for places are going up too, plus perhaps wages. So, these are contributing factors to those increases,” Mr. Mapa said.

However, slower inflation for the heavily weighted food and nonalcoholic beverages index tempered overall price pressures in January. 

Food inflation eased to 1.1% from 1.4% in December, as better weather conditions boosted local agriculture production and normalized prices.

Particularly, inflation for vegetables, tubers, plantains, cooking bananas and pulses slowed sharply to 3.3% from 11.6% in the previous month.

“The floods are over now. So, our provinces are producing again, particularly in Luzon,” Mr. Mapa said, adding that prices of some vegetables have normalized.

The PSA likewise saw slower price growth for corn, meat and other parts of slaughtered land animals, fish and other seafood, as well as oils and fats.

Rice prices

On the other hand, the decline in rice prices slowed to -8.5% year on year in January after nine straight months of double-digit dips. 

This marked a softer drop from -12.3% in December and was the slowest decline in rice prices in 10 months or since -7.7% in March 2025.

In January, the average price of local regular milled rice fell by 10.28% to PHP 43.29 per kilo from PHP 48.25 per kilo a year ago but inched up by 4.34% from PHP 41.49 in December, according to the PSA. 

Well-milled rice was likewise cheaper by 7.55% year on year at PHP 50.05 per kilo from PHP 54.14 but climbed by 3.73% from PHP 48.25 in December. On the other hand, the cost of special rice edged down by an annual 5.29% to PHP 59.79 per kilo from PHP 63.13 but went up by 2.42% month on month from PHP 58.38.

The Philippines reopened its market to imported rice on Jan. 1 after the government imposed a four-month ban in September.

PSA data showed that core inflation, which excludes volatile prices of food and fuel, likewise accelerated to 2.8% in January, from 2.6% in the same month last year and 2.4% in December.

January saw the fastest core inflation in one-and-a-half years or since the 2.9% print in July 2024.

Meanwhile, inflation in the National Capital Region (NCR) bucked the national trend, easing to 1.9% in January, from 2.3% in December and 2.8% in the prior year.

However, inflation in areas outside NCR matched the nationwide CPI at 2%, accelerating from 1.7% a month ago. Year on year, it cooled from 2.9%.   

Inflation for the bottom 30% of income households was also faster at 1.6% in January from 1.1% in December. However, it eased from 2.4% logged a year earlier.

Meanwhile, Mr. Mapa noted that the PSA is working on rebasing the CPI to 2025 from the current 2018, with the first 2025-based inflation report likely to be released by January 2027.

“Currently, the technical staff is identifying the weight adjustments using our 2025 Family Income and Expenditure Survey, as it’s still [ongoing],” he added.

Easing path

With inflation starting to pick up, the central bank may now be more cautious about further monetary policy easing.

Still, analysts see a sixth straight cut at the Monetary Board’s Feb. 19 review remaining on the table, especially amid lingering growth woes. 

“All in all, we think January’s CPI has made the path to further rate cuts rougher,” HSBC Global Investment Research ASEAN economist Aris D. Dacanay said in an e-mailed commentary. “Although growth has slowed to its slowest pace since 2011, barring the COVID-19 pandemic, inflation hasn’t been as benign as warranted over the past two months.”

“Cognizant of this risk, we still think the BSP will likely cut its policy rate in February, since we expect growth concerns to outweigh inflation when deliberating monetary policy,” he added.

Mr. Dacanay noted that the government’s move to lift its rice import freeze and the muted demand could impact commodity prices in the months ahead.

On the other hand, Chinabank Research projects that base effects would push headline inflation  to the upper end of the central bank’s target by the second quarter.

Food supply issues, elevated energy prices and higher transport fares as well as minimum wages could bring price pressures, it added.

“Still, with inflation projected to average within target this year, we think the BSP has room to continue cutting interest rates, possibly at its Feb. 19 meeting, to help support the sluggish economy,” Chinabank Research said in a note.

For 2026, the BSP expects inflation to average 3.2%.

“The inflation outlook continues to be benign while inflation expectations remain well anchored,” the central bank said in a statement. “For 2026 and 2027, inflation is expected to settle within the 3% ± 1 ppt target.”

The benchmark policy rate stands at an over-three year low of 4.5%, after the Monetary Board delivered a total of 200 basis points  (bps) in cuts since it began its easing cycle in August 2024.

“On balance, the Monetary Board sees the monetary policy easing cycle as nearing its end. Any further easing is likely to be limited and guided by incoming data,” it said.

BSP Governor Eli M. Remolona, Jr. earlier said that they could help spur demand to boost the economy by easing borrowing costs, if such a move would still ensure that inflation will remain low.

He left the door open to a 25-bp cut this month after fourth-quarter growth turned out weaker than they anticipated but noted that inflation will be their top consideration.

However, the Monetary Board maintained that they are nearing the end of the current easing cycle. — Katherine K. Chan, Reporter

The Philippine government should boost industrial output through targeted tax incentives while cutting reliance on borrowing, allowing the private sector to drive economic activity and support a slowing economy that showed signs of a “growth recession” last year, a congressional think tank said.

The Congressional Policy and Budget Research Department (CPBRD) said Philippine job data point to a recession based on an economic indicator that flags a looming slowdown when the three‑month average unemployment rate climbs half-a-percentage point above its past-year low.

“The burgeoning unemployment problem is likely related to the demonstrably hamstrung industrial sector,” the 24-page report, authored by David Joseph Emmanuel Barua Yap, Jr., Ma. Kristina P. Ortiz and Krishna Margaret U. Mirida, said.

The think tank said employment data breached the Sahm rule for five months from July to November 2025, while seasonally adjusted job figures from 2023 to 2025 showed the threshold was crossed for nine months from February to October 2025.

Seasonally adjusted job data from 2021 to 2025 showed that the Sahm rule was breached only in November 2025, it added.

“All outcomes indicate substantial labor market stress, with employment contracting by 1.76 million workers on average during Sahm — signal months in which the labor force declined or stagnated, and youth unemployment peaking at 3.2 percentage points year on year,” the CPBRD said.

“Viewed in conjunction with the appreciable slowdown of the Philippine economy in the third quarter, evidence suggests that the Philippines entered a ‘growth recession’ in the latter half of 2025,” it added, referring to the revised 3.9% gross domestic product (GDP) growth in the third quarter.

While a formal recession is defined as two consecutive quarters of contraction, recent economic data have raised concerns over a “growth recession,” where GDP growth remains positive amid rising unemployment and underemployment.

Philippine GDP grew by 4.4% in 2025, slowing from 5.7% in 2024, and below the Development Budget Coordination Committee’s 5.5%-6.5% goal. In the fourth quarter, GDP expanded by a weaker-than-expected 3% in a period usually buoyed by holiday spending.

Unemployment rose to 4.4% year on year in November despite the holiday hiring season, translating to 2.25 million jobless Filipinos, defying the usual trend of job gains during the period.

“The numbers constitute evidence that the Philippines may have been in a recession for most of 2025,” the CPBRD said.

The findings underscore mounting pressure on the government to push through reforms aimed at averting a full-blown recession. Policymakers should boost industrial activity by cutting tax and regulatory burdens, while continuing the state’s fiscal consolidation effort, the CPBRD said.

“Given the established linkages across industrial sector performance, quality employment generation, and income generation, the government is enjoined to pursue policies that would unleash the productive potential of Philippine industries,” it said.

Targeted tax exemptions, such as rebates or cuts for “high employment multiplier” industries like manufacturing, logistics and energy sectors, should be implemented to boost job creation and support the development of a sustainable industrial base, the think tank said.

“The cumulative burden of regulatory compliance costs and taxes spanning multiple agencies constrains firm productivity, expansion and job generation potential,” the CPBRD said.

Policymakers should also improve zoning by clustering industrial sites through a public infrastructure program in the suburbs, while cutting tariffs on goods that could enhance worker and production productivity to help spur economic growth, it added.

The CPBRD said the government should also establish a “robust dialogue mechanism” between the private sector and policymakers to ensure industrial policy remains responsive to evolving business needs.

There should also be a review of the wage-setting mechanism to ensure the current system remains effective and responsive to the job market, it added.

Policymakers should also rein in spending and avoid stimulus programs, the think tank said, warning that such measures could backfire and worsen the country’s debt position.

“Insisting upon yet another expansion in government spending to accommodate a stimulus program would inevitably lead to higher debt servicing requirements, an even larger debt overhang, and a heightened risk of a default,” it said.

The Philippines’ outstanding debt climbed to a record PHP 17.71 trillion in 2025, exceeding the projected year-end level of PHP 17.36 trillion by 2% and rising by 10.32% from PHP 16.05 trillion a year earlier.

This brought the outstanding debt as a share of gross domestic product (GDP) to 63.2% as of end-2025, up from 60.7% a year earlier, the Bureau of the Treasury said.

This marks the highest annual debt-to-GDP ratio in two decades, surpassing the 65.7% recorded in 2005. It also exceeds the 60% threshold that multilateral lenders consider manageable for developing economies, as well as the government’s end-2025 projection of 61.3% under its updated medium-term fiscal framework.

“At best, a stimulus program would be exchanging one crisis for another,” the CPBRD said. “At worst, it would compound the ongoing economic slowdown with a debt crisis.”

“Instead, the government is advised to aggressively pursue fiscal consolidation, improve public expenditure efficiency, and prioritize investment over consumption,” it added.

Meanwhile, the slowdown in growth could be largely attributed to the Philippines’ inability to attract investments, coupled with government underspending that has weighed on economic growth.

“This reflects deeper structural constraints such as weak private investment, uneven public spending, governance concerns, and external headwinds that have dampened confidence and productivity,” John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said in a Viber message. “Industry reforms that strengthen ease of doing business, infrastructure delivery, digitalization, and the overall investment climate are therefore critical.”

IBON Foundation Executive Director Jose Enrique “Sonny” A. Africa said policymakers should look beyond tax breaks to spur industrial activity, stressing the need for broad and ambitious reforms to usher in a golden age of industrial development.

“The government really has to have much more ambition and industrial vision for the country,” he said in a Viber message.

“This includes trade protection, regulation of foreign investment to build domestic capacity, promoting indigenous science and technology, strategic coordination of credit and finance, tax and other fiscal incentives, public investment in infrastructure, and expanding mass purchasing power,” he added.

The government should also look at letting local officials handle industrial development policies, Leonardo A. Lanzona, an economics professor at the Ateneo de Manila University, said.

“In this way, the industrial policy will be more in tune with the needs and resources of their communities,” he said in a Facebook Messenger chat. — Kenneth Christiane L. Basilio, Reporter

The Philippines remains on track for a possible credit rating upgrade as improving fiscal and external balances outweigh risks from the government’s flood control controversy, Standard & Poor’s (S&P) Global Ratings said.

“We also see the Philippine sovereign credit metrics strengthening over the next one to two years,” the rating company said in a Feb. 3 report. “Over this period, we expect that narrowing fiscal and current account deficits could augment sovereign credit buffers sufficiently to better support a higher rating.”

S&P last affirmed the Philippines’ long-term “BBB+” and short-term “A-2” credit ratings in November. It also kept a “positive” outlook on the country, signaling that a rating upgrade is possible over the next one to two years if improvements in credit fundamentals are sustained.

The debt watcher said it remains optimistic about the Philippines’ medium-term growth prospects despite the political fallout from allegations of corruption tied to flood control projects.

However, it cautioned that the controversy could slow progress in strengthening the country’s credit profile.

“The political spillover of alleged corruption related to flood control projects may slow the credit improvement,” S&P said.

It added that the government has devoted significant attention to investigating the misuse of public funds and addressing impeachment complaints against the President, while some infrastructure projects have been suspended as a result.

Still, S&P kept its gross domestic product (GDP) growth forecast for the Philippines at 5.7% this year, near the upper end of the government’s 5% to 6% goal.

This would make the Philippines one of the fastest-growing economies in the Asia-Pacific region, trailing only India and Vietnam, which are projected to expand by 6.7%.

“Despite a likely economic slowdown, we still expect the Philippines to remain an outperformer among peers at similar levels of average income,” S&P said.

The Philippine economy grew 4.4% last year, its weakest performance in five years. Fourth-quarter GDP growth slowed to 3%, the lowest in 16 years excluding the pandemic period, as delays in flood control projects weighed on investment, household spending, and government disbursements.

Fiscal pressures also remained evident. The National Government’s budget deficit had widened to PHP 1.26 trillion as of end-November 2025 from PHP 1.18 trillion a year earlier, according to Treasury data. This reflected sluggish revenue growth alongside restrained spending during the period.

State revenue reached PHP 340.7 billion in November, a marginal 0.72% increase from a year earlier.

Even so, S&P said reduced capital spending would likely limit the impact of weaker revenue performance on the fiscal deficit. It expects the deficit to continue narrowing over the medium term as fiscal consolidation efforts take hold.

For 2027 and 2028, S&P projected GDP growth at 6.5%. The Development Budget Coordination Committee is targeting economic growth of 5.5% to 6.5% next year and 6% to 7% in 2028.

S&P said an upgrade to the Philippines’ credit rating could occur if the government strengthens fiscal consolidation and further narrows its current account deficits, supporting a stable external position over the long term.

Ensuring that the narrow net external balance supports a structural net asset position would be credit positive.

On the other hand, S&P warned that a deterioration in fiscal or debt metrics, coupled with weaker long-term growth prospects, could prompt it to revise the country’s outlook to “stable.”

“We could also revise the outlook to stable if persistently large current account deficits lead to a structural weakening of the Philippines’ external balance sheet,” it said.

Data from the Bangko Sentral ng Pilipinas (BSP) showed that the country’s current account deficit narrowed to 2.8% of GDP in the third quarter of last year from 4.8% a year earlier.

The BSP expects the current account deficit to have settled at 3.2% of GDP at end-2025 and ease further to 3% this year. — Katherine K. Chan

Manila and Tokyo on Wednesday signed an PHP 8.18-billion loan agreement to rehabilitate the Metro Rail Transit Line 3 (MRT-3), as the heavily used rail line continues to face technical and operational disruptions.

Foreign Affairs Secretary Ma. Theresa P. Lazaro said the funding aims to restore MRT-3 to its original “as-designed condition,” allowing for improved reliability, higher capacity and sustained performance over the long term.

“More importantly, it will translate into safer journeys, shorter travel times, and an improved commuter experience for the millions of Filipinos who rely on MRT-3 every day,” she said in prepared remarks sent to reporters.

The loan amounts to JPY 21.63 billion, or PHP 8.18 billion, with a repayment period of 40 years, including a 10-year grace period, at an interest rate of 0.8% per annum, the Japanese Embassy in Manila said in a statement.

The rehabilitation project includes the replacement of the MRT-3’s mainline rails, the overhaul of train vehicles and integration with other MRT-related projects. It also covers the procurement of bogie frames and bogie assemblies needed to improve train stability and safety.

The project also seeks to restore and upgrade key railway subsystems, including tracks, the signaling system, power supply system, overhead catenary system, communications system and various maintenance and station facilities. The rehabilitation is targeted for completion by October 2029.

“The continued rehabilitation of this vital transport system is therefore not merely an infrastructure project, but a direct investment in the productivity, safety and quality of life of our people,” Ms. Lazaro said.

Japanese Ambassador to Manila Endo Kazuya said the concessional loan would support the continued rehabilitation and maintenance of a rail system that plays a central role in Metro Manila’s daily transport needs.

“The MRT-3 has been an essential part of everyday life in Metro Manila, carrying hundreds of thousands of passengers every day,” he said. “Over time, however, aging facilities and operational challenges affected the quality of service.”

In 2023, the Philippines and Japan signed the first tranche of the loan package worth JPY 18.4 billion, which was used to begin overhauling worn-out tracks and light rail vehicles.

“Through various forms of support, Japan is proud to contribute to the advancement of the Philippine railway system,” Mr. Endo said, adding that Japanese railway experts are involved in most major rail projects in the country.

Running along a large stretch of Epifanio de los Santos Avenue (EDSA), Metro Manila’s main thoroughfare, MRT-3 serves as a critical connector in the government’s effort to integrate existing and future rail lines.

Rene S. Santiago, an international transport development consultant and former president of the Transportation Science Society of the Philippines, said faster improvements could be achieved by allowing wider use of the government’s long-idled Dalian trains.

“There can be immediate improvement if the prohibition versus Dalian trains is lifted,” he said in a Viber message.

The Philippines acquired 48 China-made Dalian train cars in 2016, but most were left unused for years due to technical compatibility issues. Only nine cars were deployed on MRT-3 last year.

Nigel Paul C. Villarete, a senior adviser on public-private partnerships at Libra Konsult, Inc., said the rehabilitation would extend the MRT-3’s lifespan and improve service reliability, but stressed the need to assess the economic impact of the investment.

“Is it worth spending money for the expected improvement?” he said via Viber. “The metric is not how much is spent, but how much the benefits amount to in economic terms.”

He also warned that the EDSA Bus Rapid Transit system, which serves a similar commuter base, could be affected without integrated transport planning.

“No one analyzes that upgrading one mode can have a negative economic effect on another when both serve the same market,” he said.

John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said sustained upgrades for the MRT-3 is needed for long-term viability.

“A more dependable MRT-3 reduces congestion, lowers travel time costs and strengthens the National Capital Region’s productivity,” he said in a Viber message.

He added that the government should make rehabilitation continuous and not episodic, so operational difficulties do not recur.

The MRT-3, which carries about 400,000 passengers daily, has long struggled with frequent technical glitches, limited train availability and maintenance backlogs, prompting renewed calls for urgent rehabilitation of the 27-year-old system. — Adrian H. Halili, Reporter

The Philippines’ outstanding debt climbed to a record PHP 17.708 trillion at the end of 2025, exceeding the government’s projection amid increased issuances and a weaker peso.

The National Government’s (NG) end-2025 outstanding debt rose by 10.32% from the PHP 16.05 trillion recorded in the previous year, according to data released by the Bureau of the Treasury (BTr) on Tuesday.

This was also 2% higher than the PHP 17.36-trillion projected year-end level.

Month on month, the debt stock inched up by 0.34% from PHP 17.65 trillion at end-November.

“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 peso ended 2025 at PHP 58.79 against the US dollar, weakening by 94.3 centavos or 1.63% from its PHP 57.847 finish in 2024. It also fell against the euro, closing at PHP 69.0547 from PHP 59.9179 the prior year. Against the yen, it dropped to PHP 0.3753 from PHP 0.3688.

This brought the outstanding debt as a share of gross domestic product (GDP) to 63.2% as of end-2025, up from 60.7% a year earlier, the Treasury said.

This is the highest annual debt-to-GDP ratio in 20 years or since the 65.7% in 2005 and is above the 60% threshold considered by multilateral lenders to be manageable for developing economies.

This is also higher than the government’s end-2025 projection of a 61.3% ratio under its updated medium-term fiscal framework.

Philippine GDP growth slowed to 4.4% in 2025 from 5.7% in 2024 and missing the government’s 5.5%-6.5% target. This was the economy’s worst performance in five years or since the 9.5% contraction in 2020 due to the coronavirus pandemic. Outside of the pandemic, this was the weakest annual expansion since the 3.9% in 2011.

Despite the higher end-2025 debt level, the BTr said the country’s debt profile “remained resilient” as 68.4% of borrowings were from domestic sources.

“By prioritizing peso-denominated financing, which is predominantly held domestically, the government reduces exposure to exchange rate volatility. It also keeps interest payments within the domestic economy and provides Filipinos with a stable and secure investment option,” it said.

NG debt is the total amount owed by the Philippine government to creditors such as international financial institutions, development partner-countries, banks, global bondholders and other investors.

Broken down, domestic debt grew by 10.85% to PHP 12.116 trillion as of December 2025 from PHP 10.93 trillion at end-2024. This was 0.66% above the PHP 12.04-trillion year-end projection.

The Treasury attributed the year-on-year increase to the net issuance of government securities via its regular auctions and an offering of five-year retail Treasury bonds in August, through which it raised PHP 507.16 billion.

Month on month, domestic borrowings slipped by 0.1% from P12.117 at end-November.

Meanwhile, external liabilities rose by 9.19% to PHP 5.59 trillion at end-2025 from PHP 5.12 trillion in 2024. This was also higher than the PHP 5.32-trillion estimate and also went up by 1.1% from PHP 5.53 trillion at end-November.

“This is driven by the issuance of new global bonds, net availment of official development assistance from international development partners, as well as the upward revaluation of foreign currency-denominated debt brought about by unfavorable exchange rate movements,” the BTr said.

Outstanding foreign debt was composed of PHP 2.82 trillion in global bond issuances and PHP 2.77 trillion in loans.

External debt securities were made up of PHP 2.39 trillion in US dollar bonds, PHP 262.41 billion in euro bonds, PHP 58.79 billion in Islamic certificates, PHP 56.85 billion in Japanese yen bonds, and PHP 54.77 billion in peso global bonds.

The government raised USD 4.5 billion from the international market last year as it issued US dollar-denominated global bonds, raising USD 2 billion in May and USD 2.5 billion in August.

“For the full year, the NG raised PHP 1.18 trillion in net domestic financing, demonstrating sustained investor confidence in government securities amid evolving market conditions,” the BTr said.

“External financing remained prudent and largely concessional. This results in a net external financing level of PHP 317.02 billion from global bond issuances and program and project loans to support infrastructure, social reform, and agriculture and industry sectors,” it added.

Meanwhile, NG-guaranteed liabilities slipped by 0.6% to PHP 344.57 billion at end-December from PHP 346.66 billion in the previous year due to net repayments of both domestic and external guarantees.

“Guaranteed debt remained manageable at only around 1.2% of GDP, indicating minimal contingent debt risks,” the BTr said.

Month on month, guaranteed debt dipped by 3.22% from PHP 356.04 billion at end-November.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the higher debt stock at end‑2025 reflected an increase in borrowings to finance a bigger budget gap. The government’s budget deficit widened to PHP 1.26 trillion in the first 11 months of 2025 from the PHP 1.18-billion gap in the same period in 2024.

“For the coming months, the outstanding National Government debt could go to new record highs amid new National Government borrowings in recent months and also the need to hedge both local and foreign borrowings of the National Government in view of the Trump factor and other geopolitical risk factors,” he said.

Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said the record-high debt shows that the government’s fiscal space is tightening.

“We need faster revenue growth, stronger spending discipline, and reforms that boost productivity,” he said in a Viber message.

Mr. Ravelas added that a weaker peso, which drives up the value of the government’s obligations, will remain a challenge in the months ahead.

Based on the 2026 Budget of Expenditures and Sources of Financing, the outstanding debt is projected to balloon to a record PHP 19.06 trillion by the end of 2026, or PHP 13.28 trillion in domestic obligations and PHP 5.78 trillion in external liabilities. The Marcos administration plans to borrow PHP 2.68 trillion this year, or PHP 2.05 trillion from the domestic market and PHP 627.1 billion from external sources.

The government expects the debt-to-GDP ratio to settle at 61.8% this year, 61.3% in 2027, 60.3% in 2028, 59.5% in 2029, and 58% by end-2030. — Aubrey Rose A. Inosante, Reporter

The government is targeting to sell three big-ticket real estate assets this year, which, along with the proceeds from the privatization of Caliraya‑Botocan‑Kalayaan (CBK) last year, could yield a combined P101 billion in revenues, the Department of Finance (DoF) said.

The Food Terminal, Inc. (FTI), the Mile Long Complex, and the Atrium condominium in Makati City are slated for disposal this year, the Privatization and Management Office (PMO) said in a Viber message on Feb. 2.

The PMO serves as the marketing arm of the government concerning transferred assets.

However, the Privatization Council has not approved minimum prices for these properties, it said.

“Together with the privatization of CBK, the privatization of these three assets and certain shares of stock, the NG (National Government) is targeting privatization nontax revenue of PHP 101 billion,” the PMO said.

This goal is much higher than the PHP 5-billion privatization target for 2025. The PMO has not released data on its full-year 2025 revenues.

According to a document seen by BusinessWorld last year, the FTI property in Taguig City has an estimated value of PHP 40.4 billion.

Meanwhile, the Mile Long Complex in Makati City is worth about PHP 12.26 billion. This is occupied by various tenants with buildings and has other land improvements classified as residential and commercial lots.

Also in Makati, the Atrium property, consisting of 24 condominium units and 21 parking slots, has been valued at about PHP 449 million.

Last year, the government privatized the 733.95-megawatt CBK hydroelectric power complex in Laguna, awarding it to the Thunder Consortium, which offered PHP 36.27 billion. The consortium was made up of Aboitiz Renewables, Inc., Sumitomo Corp., and Electric Power Development Co.

Analysts said the government’s PHP 101-billion privatization target for this year is ambitious due to execution.

The Marcos administration’s nontax revenue target from asset sales this year is “more of an aspirational ceiling than a realistic baseline,” Leonardo A. Lanzona, an economics professor at Ateneo de Manila University, said.

“The government has the right assets and the right intent, but Philippine privatization has a deeply entrenched pattern of ambitious targets followed by dramatic downgrades,” he said in a Messenger chat on Tuesday.

Last year’s PHP 5-billion privatization target was cut from the original PHP 101 billion as the government said it saw “slight delays” in selling properties.

“A more credible near-term expectation might be something in the PHP 30 [billion] to PHP 50-billion range — achievable if one or two of the mega-deals actually close on time — with the full PHP 101 billion being more of a 2026-2027 cumulative story rather than a single-year outcome,” Mr. Lanzona said.

Conflicting policy priorities within the Executive branch have often stalled deals and the lack of a clear directive has put assets in limbo, he added, citing the case of the FTI property. The Agriculture department has said it wants to revive the FTI’s operations, even as the DoF has long pushed for its privatization.

“The optimist in me would say that the target is ambitious but not impossible, though execution risk is high given the Philippines’ track record of delays from valuation disputes, legal challenges, and slow transaction processes,” John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, likewise said in a Viber message.

“Achieving it will depend on market timing, investor appetite for large real estate assets, and the government’s ability to run transparent, competitive bidding without governance concerns,” he said. “Key derailment risks include weak market conditions, regulatory or court bottlenecks, and credibility issues that could discourage bidders or depress prices.” — Aubrey Rose A. Inosante