Debt hits record PHP 17.71 trillion in 2025

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