NG debt service bill hits PHP 2.1T in 2025

The national government (NG) debt service payments jumped to PHP 2.1 trillion in 2025, surpassing the government’s own program which signals mounting fiscal pressures.

Data from the Bureau of the Treasury showed that NG’s debt repayments rose by 4.08% in 2025 from the PHP 2.02 trillion recorded in 2024. It also exceeded the PHP 2.05-trillion full-year program for debt payments by 2.6%.

Debt service refers to payments made by the NG on its domestic and foreign debt.

More than half, or the bulk, or 58.91% of total debt payments came from amortization payments.

Principal payments slipped by 1.46% to PHP 1.24 trillion in 2025 from PHP 1.26 trillion in the previous year. This was 3% higher than the PHP 1.2-trillion program for the year.

Amortization on domestic debt dipped by 0.26% annually to PHP 1.015 trillion in 2025 from PHP 1.018 trillion in 2024.

Principal payments on foreign debt went down by 6.53% to PHP 223.669 billion last year from PHP 239.293 billion in 2024.

On the other hand, interest payments went up by 13.2% to PHP 864.139 billion in 2025 from PHP 763.313 billion in 2024. It was 1.9% higher than the PHP 848.031-billion program for the full year.

Interest paid on domestic debt went up by 17.6% to PHP 634.846 billion in 2025 from PHP 539.829 billion in 2024.

Broken down, PHP 416.77 billion went to interest payments for fixed-rate Treasury bonds, PHP 162.74 billion for retail Treasury bonds, and PHP 44.97 billion for Treasury bills.

For external debt, interest payments went up by 2.6% to PHP 229.293 billion in 2025 from PHP 223.484 billion in the year prior.

December debt service

In December alone, debt repayments increased by 18.6% to PHP 78.642 billion from PHP 66.3 billion in the same month in 2024.

Month on month, debt repayments fell by 12.6% from PHP 89.97 billion in November.

Amortization payments surged by 80.4% to PHP 15.01 billion in December last year from PHP 8.32 billion in December 2024.

Amortization on domestic debt totaled PHP 6.25 billion in December. There were no payments made on domestic debt in December 2024.

Meanwhile, principal payments on foreign debt went up by 5.22% to PHP 8.754 billion in December from PHP 8.32 billion a year prior.

On the other hand, interest payments increased by 9.75% to PHP 63.63 billion in December from PHP 57.98 billion in the same month in 2024.

Interest paid on domestic debt increased by 11.59% to PHP 41.779 billion from PHP 37.44 billion in 2024.

Broken down, interest payments on retail Treasury bonds stood at PHP 19.18 billion, fixed-rate Treasury bonds at PHP 17.47 billion, and Treasury bills at PHP 3.76 billion.

Interest payments on external debt jumped by 6.41% year on year to PHP 21.86 billion in December from PHP 20.54 billion in 2024.

“The rise in debt service reflects more expensive borrowing from higher rates and heavier repayments,” Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas said in a Viber message.

“In 2026, pressures should stay high but may stabilize if rates ease — so the priority is smart debt management: lock in better rates, extend maturities, and borrow only for growth‑driving projects,” he added.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the higher debt servicing reflects increased NG outstanding debt in recent years.

For the coming months, he said that the country can expect to make bigger debt payments.

“Geopolitical risks, especially in the Middle East since Feb. 28, which led to higher global crude oil prices, could lead to higher inflation and interest rates, which could lead to higher interest payments and debt servicing costs,” he said in a Viber message.

“A higher US dollar-peso exchange rate… would lead to a higher peso equivalent of foreign debts that, in turn, would lead to higher principal servicing costs of foreign debts,” he added. — Justine Irish D. Tabile, Senior Reporter