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The national government’s (NG) outstanding debt slipped to PHP 17.47 trillion at the end of August, but still remained above the full-year projection, data from the Bureau of the Treasury (BTr) showed.

The latest data from the Treasury showed outstanding debt dipped by 0.5% in August from the record-high PHP 17.56 trillion at end-July. 

Despite the decline, the debt level is still 0.63% higher than the projected year-end level of PHP 17.36 trillion.

Year on year, NG debt jumped by 12.3% from PHP 15.55 trillion at the end of August 2024, the BTr said.

“This (debt reduction) was mainly due to the government’s full repayment of its biggest local bond for the year, worth PHP 516.34 billion, and a stronger peso, which reduced the value of the country’s external debt,” the BTr 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.

In August, the bulk or 69.2% of the debt stock came from domestic sources, while external obligations made up the rest.

“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% from 68.9% in the previous month,” the BTr said.

A larger share of domestic borrowings in the country’s debt profile reflects “a generally more favorable debt position” as local debt is less vulnerable to shifts in foreign exchange movements, it added.

Domestic debt, which was composed of government securities, slid by 0.2% to PHP 12.09 trillion as of end-August from PHP 12.11 trillion as of end-July. It also rose by 12% annually from PHP 10.79 trillion in August last year.

This was already 0.35% higher than the PHP 12.04-trillion year-end domestic debt projection.

“Year to date, the NG raised PHP 1.84 trillion in gross domestic financing, including the highly successful issuance of Retail Treasury Bond Tranche 31 (RTB-31),” the BTr said.

On the other hand, external debt fell by 1.4% to PHP 5.38 trillion in August from PHP 5.46 trillion in the previous month. This also exceeded the PHP 5.32-trillion external debt projection this year by 1.24%.

“The reduction was attributed primarily to the effect of a stronger peso on external guarantees. Guaranteed obligations remained well-managed at only 2% of total NG debt,” the Treasury said.

Year on year, foreign debt climbed by 13.1% from PHP 4.76 trillion.

Foreign debt was composed mainly of PHP 2.74 trillion in global bonds and PHP 2.64 trillion in loans.

External debt securities were made up of PHP 2.32 trillion in US dollar bonds, PHP 253.39 billion in euro bonds, PHP 58.5 billion in Japanese yen bonds, PHP 57.04 billion in Islamic certificates and PHP 54.77 billion in peso global bonds.

For August, NG-guaranteed obligations slipped by 1.8% to PHP 346.46 billion from the end-July level of PHP 352.97 billion.

Year on year, it fell by 5.5% from PHP 366.57 billion.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort attributed the minimal monthly decline in outstanding debt to the net payments of large debt maturities.

“This is somewhat expected for large debt maturities paid to reduce outstanding debt but offset by new NG borrowings to finance the NG budget deficit,” he said in a Viber message.

In August, the BTr raised P507.16 billion through its RTB offering.

Mr. Ricafort warned that total outstanding debt may breach the government’s PHP 17.36-trillion projection by yearend, citing upcoming payments for maturing securities in September.

“(It) could still go up after payment of large NG debt maturities until September 2025,” Mr. Ricafort said.

John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said the modest decline in debt may be temporary, citing scheduled repayments and favorable foreign exchange movements.

Mr. Rivera noted that NG debt remains 12.3% higher year on year and is likely to climb further, “likely staying above” PHP 17.4 trillion by yearend.

At the end of the second quarter, NG debt as a share of gross domestic product surged to 63.1%, the highest since 2005.

The Department of Finance  expects the NG debt-to-GDP ratio to ease to 61.3% by end-2025 and eventually fall to 58% by 2030. — Aubrey Rose A. Inosante

The Asian Development Bank (ADB) has trimmed its gross domestic product (GDP) growth forecast for the Philippines for 2026, while keeping its projection this year, citing persistent external headwinds that weigh on investments.

At the same time, the ADB warned widespread corruption can impact economic growth and investor sentiment, saying it is a “heightened risk.”

In its latest Asian Development Outlook, the multilateral lender trimmed its Philippine growth forecast to 5.7% in 2026 from 5.8% in its July projection. This is below the Philippine government’s 6-7% growth goal for 2026.

For this year, the ADB kept its growth forecast unchanged at 5.6%, which is within the government’s 5.5 to 6.5% target.

“The Philippines’ growth outlook remains resilient amid a global environment of shifting trade and investment policies and heightened geopolitical uncertainties,” ADB Country Director for the Philippines Andrew Jeffries said in a statement on Tuesday.

“Though these uncertainties pose increased risk, we see strong domestic demand anchoring growth, with sustained investments and an accommodative monetary policy supporting the economy’s expansion.”

ADB Senior Country Economist for the Philippines Jacqueline Connell said the Philippine growth forecast for 2026 was downgraded mainly due to heightened uncertainty, shifting trade and investment policies, and lower growth outlook in major advanced economies.

“We see that this will weigh on trade and investment prospects, so that’s the main reason,” she said at a briefing on Tuesday.

Despite external challenges, domestic demand is expected to drive the Philippine economy’s growth this year, the ADB said. This is supported by easing monetary conditions which will help offset the impact of external uncertainties, it added.

In Southeast Asia, the Philippines is projected to be the second-fastest-growing economy until 2026, just behind Vietnam (6%).

It is ahead of Cambodia (5%), Indonesia (5%), Malaysia (4.2%), Lao PDR (3.8%), Timor Leste (3.4%), Myanmar (2%),  Thailand (1.6%),  Brunei Darussalam (1.5%), and Singapore (1.4%).

The Philippines’ growth forecast is also above the ADB’s projection for developing Asia, which is expected to grow 4.5% in 2026 and 4.8% this year. The region includes 46 Asia-Pacific countries, but excludes Japan, Australia and New Zealand.

“Heightened geopolitical tensions, adverse weather conditions, and climate shocks also pose risks which could drive commodity prices higher,” ADB Senior Economics Officer Teresa B. Mendoza said.

At the same time, the ADB sees headline inflation averaging 1.8% this year and 3.2% in 2026. This is slightly higher than the Bangko Sentral ng Pilipinas’ (BSP) 1.7% average forecast for 2025 but lower than 3.3% for next year.

Ms. Mendoza said monetary policy will likely remain accommodative as inflation remains moderate.

For the first eight months, headline inflation averaged 1.7%.

Since August 2024, the BSP has lowered borrowing costs by a total of 150 basis points, bringing the benchmark rate to 5%.

“Continued investment and leveraging on wide-reaching structural reforms that we have seen over the past few years up to this year are essential to lifting growth, generating quality jobs, and reducing productivity and demand,” Ms. Mendoza said.

She cited new laws such as the Accelerated and Reformed Right-of-Way (ARROW) Act that will help speed up infrastructure projects.

Corruption

Meanwhile, corruption remains a “heightened risk” in the Philippines, according to the ADB.

“More broadly, corruption has broad impacts on economic growth in general and investment sentiment. We’re monitoring that and how that may be affected going forward,” Mr. Jeffries said, when asked why there was no mention of governance issues despite a widening corruption scandal involving government projects.

There is growing scrutiny of billions of pesos in flood control projects, with multiple congressional committees and the Palace-backed Independent Commission for Infrastructure probing allegations of corruption.

Finance Secretary Ralph G. Recto earlier said corruption related to flood control projects had cost the Philippines PHP 42.3 billion to PHP 118.5 billion in economic losses annually since 2023.

Mr. Jeffries said there was no reason to cut the Philippine GDP projections due to the corruption scandal. “Between now and our December update, there may be more quantifiable data available that may alter our projections,” he added.

He also assured that the ADB’s partnership with the Philippines remains unaffected.

“We have very strong due diligence on the financial management capabilities of our borrowers and any gaps found are built into the project to mitigate financial management risks,” he added.

Mr. Jeffries said the bank has a joint agreement with the World Bank Group to cross-debar contractors found to have violated project guidelines or engaged in questionable conduct.

“If we find such contractors through our project processes, we debar them from future participation for a certain amount of time. The World Bank follows suit and vice versa,” he said.

While the ADB does not maintain a formal blacklist, Mr. Jeffries said all contractors are vetted against debarment lists and flagged for potential links to money laundering or other financial risks.

“Now that said, if there is an officially sanctioned government blacklist, we would honor such a list and take that into account. But it would need to be officially sanctioned and not just a list of firms in the press, so to speak,” he added.

There are 25 Infrastructure Flagship Projects funded by the ADB in support of the Marcos administration’s “Build Better More” Program. — Aubrey Rose A. Inosante, Reporter

The Department of Agriculture (DA) is considering extending the ban on rice imports until the end of the year, as farmgate prices of palay or unmilled rice continue to fall.

“I met with the President last week and we decided to extend the import ban by a minimum of 30 days,” Agriculture Secretary Francisco P. Tiu Laurel, Jr. told reporters in mixed English and Filipino at the House of Representatives on Monday.

“It is possible that it will be extended until the end of the year depending on the situation. The problem is that palay prices have dropped,” he added.   

President Ferdinand R. Marcos, Jr. had earlier ordered a 60-day suspension of rice imports starting Sept. 1 to protect Filipino farmers during harvest season and to stabilize rice prices. The suspension was originally supposed to end on Nov. 2 and applies only to regular milled and well-milled rice.

Last Friday, Presidential Communications Office Undersecretary Clarissa A. Castro said the President ordered the extension of the import ban but did not give details.

Under Republic Act No. 12078, the President is allowed to suspend or prohibit the importation of rice during a specific period, when there are excess of local or imported supply resulting in a drop in local prices.

“I also talked to our rice millers and traders last week. They are actually requesting the import ban be extended until the end of this year,” Mr. Tiu Laurel said.

Mr. Tiu Laurel said there is “a big possibility” that tariffs on imported rice would be hiked before the import ban ends.

“We are running the numbers now from 20%, 25%, or 35%, and hopefully, we can make a decision before the closure of the (import) ban,” he added.

Tariffs on foreign rice are currently at 15% until 2028.

Mr. Tiu Laurel said the import ban extension was aimed at propping up farmgate prices of unmilled rice, which had dropped to P8 to P10 per kilo in some areas. “This is a loss to farmers,” he added.

The farmgate price for palay fell by 27.8% to PHP 17.11 per kilo in August, from the PHP 23.71 per kilo last year, data from the Philippine Statistics Authority showed.

Emergency procurement

The Agriculture chief also said that the President will also issue an executive order for emergency government procurement of palay.

“The DA also asked, and it is already approved in principle, for the President to issue an order for the emergency procurement of palay and the emergency procurement for additional lease and rent of warehouses,” he added.

Mr. Tiu Laurel said that this would allow the agency to procure more palay stocks from Filipino farmers in “depressed price areas.”

He added that the National Food Authority will purchase palay from farmers at a minimum of PHP 17 per kilo under the emergency plan.

“Hopefully, that will help. We are acting fast and we are deploying additional people so that if we get additional warehouses, they will be available for us to buy and help our farmers,” he said.

The Philippines is the biggest importer of rice in the world, according to the US Department of Agriculture. It is projected to import about 4.9 million metric tons this year.

Federation of Free Farmers National Manager Raul Q. Montemayor said that extension of the rice import ban to protect farmers would not have any effect on inflation, as local harvest is expected to offset any slowdown in rice shipments.

“Rice prices and inflation should not go up since whatever imported stocks are in the market now were bought at cheap prices before the ban, and local stocks are coming from fresh harvest that were bought at low prices,” Mr. Montemayor said in a Viber message.

He added that rice traders will continue to purchase palay from farmers at low prices “for fear that cheap imports will flood the market again when the ban is lifted.”

“We believe that the ban should be complemented by a reversion of the import tariff to 35% which will provide the leeway for local traders to buy at higher prices from farmers,” he said.

On the other hand, Roehlano M. Briones, a senior research fellow at the Philippine Institute for Development Studies, said that an extended rice import freeze would only raise retail prices.

“An extended ban will work if the intended effect is supporting palay prices. However, it will also prop up retail prices, forfeiting gains from lower retail prices for poor consumers,” he said in a Viber message.

Former Agriculture Undersecretary Fermin D. Adriano said in a Viber message that the extension will further irk rice exporters from Vietnam, the country largest rice trading partner.

The Philippines is Vietnam’s top rice export market, shipping about 2.47 million metric tons in the first nine months of 2025, according to the Bureau of Plant Industry as of Sept. 11. — Adrian H. Halili, Reporter

The Philippines’ external debt service burden dropped to USD 6.72 billion in the first half of the year as less foreign loans were due for repayment, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.

Debt service on external borrowings went down by 6.2% to USD 6.72 billion as of June from USD 7.164 billion in the same period in 2024.

Broken down, principal payments declined by 13.1% year on year to USD 2.77 billion in the January-to-June period from USD 3.189 billion.

Meanwhile, interest payments dipped by 0.7% in the first six months to USD 3.949 billion as of end-June from USD 3.976 billion last year.

“The decline in the Philippines’ external debt service burden in the first half mainly reflects lower principal repayments as fewer foreign obligations matured, alongside liability management efforts and a borrowing mix favoring domestic sources,” Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said in a Viber message.

Mr. Asuncion also noted the decline in debt servicing shows the country’s foreign debts are manageable, giving the government more fiscal space and easing the strain on its dollar reserves.

Meanwhile, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said external debt servicing declined as foreign loans account for a smaller share in the National Government’s total borrowing mix.

“This could be attributed to the lower share of foreign borrowings in the total National Government borrowing mix in recent years to better manage (foreign exchange) risks entailed in foreign borrowings,” he said in a Viber message.

The debt service burden represents principal and interest payments after rescheduling, according to the BSP.

This includes principal and interest payments on fixed medium- and long-term credits, including International Monetary Fund credits, loans covered by the Paris Club and commercial bank rescheduling, and New Money Facilities. It also covers interest payments on fixed and revolving short-term liabilities of banks and nonbanks.

However, the debt service data exclude prepayments on future years’ maturities of foreign loans and principal payments on fixed and revolving short-term liabilities of banks and nonbanks.

In the first half, the debt service burden as a share of gross domestic product (GDP) fell to 2.8% from 3.2% in the comparable year-ago period.

Meanwhile, the country’s outstanding external debt reached USD 148.873 billion as of June, a 14.4% jump from USD 130.182 a year ago.

Of the total, USD 94.801 billion is public sector debt, while USD 54.072 billion is private sector debt.

This brought the external debt as a percentage of GDP to 31.2% in the first six months from 28.9% in the same period last year.

Mr. Asuncion said the government may see a slight uptick in its foreign debt service bill in the coming months as more foreign obligations will be due for repayment.

“For the second half, we expect a modest pickup as more amortizations fall due, but the debt service ratio should stay within a comfortable range given ample reserves and a still-favorable global rate environment,” he said.

The BSP’s external debt data cover borrowings of Philippine residents from nonresident creditors, regardless of sector, maturity, creditor type, debt instruments or currency denomination.

The central bank gathers data on external debt through reports submitted by borrowers, banks, and major foreign creditors. — Katherine K. Chan

 

The Philippines slipped one spot in a global index on economic freedom, despite improvements in some areas, according to the Canada-based think tank Fraser Institute.

The country ranked 62^nd out of 165 economies in conservative think tank’s Economic Freedom of the World report, which uses 2023 data. In the previous year’s index, the Philippines ranked 61^st place.

This was the Philippines’ lowest placement in the index in two years, or since it ranked 68^th in 2021.

Despite the lower ranking, the country’s score inched up to 7.05 out of 10 in 2023 from 7.01 in 2022.

Among Asia-Pacific jurisdictions, the Philippines lagged behind Hong Kong (8.55), Singapore (8.50), New Zealand (8.33), Australia (8.03), Taiwan (8.03), Japan (7.83), Malaysia (7.56), South Korea (7.53), Thailand (7.10), and Brunei Darussalam (7.09).

However, the Philippines was ahead of Indonesia (6.96), Mongolia (6.83), Cambodia (6.79), Vietnam (6.21), China (6.13), Papua New Guinea (6.09), Fiji (6.08), Timor-Leste (5.97), Laos (5.65), and Myanmar (4.46).

The index measures the degree to which citizens are allowed to make their own economic choices through five areas: size of government, legal system and property rights, sound money, freedom to trade internationally, and regulation.

The Philippines had its highest score in the sound money category with 9.01, ranking 34^th out of the 165 countries, slightly lower than its previous score of 9.04.

The country’s score in size of government went up to 7.88 from 7.77 previously. Its current ranking was at 21^st place from 26^th previously.

Manila’s score in regulation also went up to 6.65 (64^th) from 6.55 (67^th) previously.

However, the country yet again performed worst in the legal system and property rights area with a score of 4.57, ranking 109^th. Its score slightly improved from 4.55 previously.

Meanwhile, its score in freedom to trade internationally stood at 7.15, ranking 86^th from 87^th previously.

Foundation for Economic Freedom President Calixto V. Chikiamco said that the Philippines continues to underperform in the areas of legal system and property rights and trade freedom.

“Particularly in agricultural trade. We are still protecting our agricultural sector with quotas, high tariffs, and other forms of restrictions,” he said in a Viber message.

Meanwhile, Mr. Chikiamco said that the previous administration’s unilateral cancellation of the contracts with the private water concessionaires and refusal to abide by the decision of arbitration proceedings have impacted the country’s overall ranking.

“That and other instances where contracts aren’t honored cause low ratings of the country [in legal system and property rights],” he added.

However, Mr. Chikiamco said that the slight dip in the country’s ranking may also be attributed to improvements in other countries.

“The Philippines can fare better by dismantling agricultural protectionism, reforming an inefficient and corrupt judicial system, removing the Filipino First and Filipino Only provisions in the Constitution, and forging more free trade agreements with more economies,” he added.

Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera said that the results of the index suggest that the Philippines is making progress, but “other economies are reforming faster and more comprehensively.”

“We continue to lag in critical areas like rule of law, regulatory quality, judicial independence, and most especially corruption control, which weigh down its overall ranking,” he said in a Viber message.

To improve, he said that there is a need for the Philippines to strengthen its institutional frameworks.

“It must also enforce property rights, simplify regulations, and promote a more transparent and predictable policy environment to boost investor confidence and economic dynamism,” Mr. Rivera said.

According to the Fraser Institute, economic freedom has been declining since the pandemic.

“Global economic freedom peaked in 2019 but has declined in each of the four years since then, which hasn’t happened since we began measuring economic freedom more than 25 years ago,” Matthew Mitchell, a senior fellow at the Fraser Institute, said in the report.

Hong Kong topped the latest index, followed by Singapore, New Zealand, Switzerland, the United States, Ireland, Australia and Taiwan (tied for 7^th), Denmark, and the Netherlands.

However, the Fraser Institute expects US President Donald J. Trump’s tariffs to further depress US economic freedom.

“When countries move to restrict trade freedom, other areas of economic freedom, such as size of government, sound money, and regulatory freedom, often soon follow,” it added.

Meanwhile, the lowest scoring economies on the index were Venezuela, Zimbabwe, Sudan, Algeria, Iran, Myanmar, Argentina, Syria, Libya, and Chad. — Justine Irish D. Tabile, Reporter