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The national government’s (NG) outstanding debt inched up to PHP 17.562 trillion at the end of October due to a weaker peso.

Data from the Bureau of the Treasury (BTr) showed outstanding debt rose by 0.61% to PHP 17.562 trillion in October from PHP 17.46 trillion at end-September. 

This was 1.2% higher than the PHP 17.36-trillion projected debt level by end-2025.

Year on year, NG debt jumped by 9.62% from PHP 16.02 trillion as of October 2024, the BTr said.

The end-October level was also a tad lower than the record-high PHP 17.563 trillion in outstanding debt seen as of July. 

“The expansion was driven by net issuances of domestic and external liabilities, as well as due to the upward revaluation effects of the weaker peso against the US dollar,” the BTr said.

The peso depreciated to PHP 58.771 per dollar at the end of October from PHP 58.149 at end- September, 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.

In October, the bulk or 68.6% of the debt stock came from domestic sources, while external obligations made up the rest, consistent with the government’s strategy to prioritize local currency financing to reduce foreign exchange risks and help develop the bond market.

Domestic debt went up by 0.6% month on month to PHP 12.05 trillion at end-October from PHP 11.97 trillion at end-September. This was slightly above the PHP 12.04-trillion year-end domestic debt projection.

The net issuance of government securities added PHP 70.65 billion to the outstanding debt, and the peso’s depreciation also increased the valuation of its retail dollar bonds by PHP 1.78 billion.

Year on year, this was 10.61% higher than the PHP 10.89 trillion recorded as of October 2024.

Meanwhile, external liabilities rose by 0.63% to PHP 5.52 trillion at end-October from PHP 5.48 trillion at end-September. This exceeded the PHP 5.32-trillion end-2025 external debt projection by 3.8%.

The month-on-month increase came “behind the net availment of loans of PHP 8.25 billion and upward net adjustments in the peso equivalent of foreign currency debt of PHP 26.1 billion,” the BTr said.

“Peso depreciation against the US dollar added PHP 58.64 billion to the debt total, while peso appreciation against third currencies provided an offset of PHP 32.54 billion.”

The outstanding foreign debt was composed of PHP 2.82 trillion in global bond issuances and PHP 2.7 trillion in loans. External debt securities were made up of PHP 2.39 trillion in US dollar bonds, PHP 257.61 billion in euro bonds, PHP 58.77 billion in Islamic certificates, PHP 57.83 billion in Japanese yen bonds, and PHP 54.77 billion in peso global bonds.

Year on year, foreign debt climbed by 7.53% from PHP 5.13 trillion.

NG-guaranteed liabilities dipped by 0.64% month on month to PHP 344.41 billion at end-October due to net repayments of PHP 1.25 billion and lower valuation of foreign currency guarantees of PHP 0.97 billion.

“The Bureau reaffirmed its commitment to prudent debt and risk management, ensuring that borrowings remain aligned with the government’s long-term fiscal sustainability goals and supportive of a thriving and stable macroeconomic environment toward a prosperous and more inclusive future for Filipinos,” the Treasury said.

NG debt as a share of gross domestic product (GDP) went up to 63.1% at end-September from 60.1% in the same period last year. This is above the 60% threshold deemed sustainable for developing countries.

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. — with inputs from A.R.A.Inosante

Industry groups on Tuesday pushed back against a proposal to impose an excise tax on single-use plastics, saying the suggested levy is unfair, could make goods expensive and lead to job losses.

“The proposed tax is discriminatory,” Benjamin So Chua, president of the Philippine Plastics Industry Association, told lawmakers at a House of Representatives hearing. “And it is regressive, increasing consumer costs disproportionately on low-income households.”

There are nine pending House bills proposing an excise tax on single‑use plastics, with the tax rate ranging from PHP 100 to PHP 150 per kilogram of plastic bags. The excise tax would then be increased by 4% every year to discourage the use of single-use plastics.

“The market price of our plastic products is PHP 90 per kilo… if you add another PHP 100 per kilo, that will more than double the price. When we add PHP 150, it will become around three times the cost,” Mr. Chua said.

“This will definitely result in demand destruction and loss of employment to our industry,” he added.

The Philippines has one of the cheapest tax rates for single-use plastics compared to other countries at PHP 0.40 per bag, the Department of Finance (DoF) said last year.

However, the Philippines is considered one of the biggest sources of plastic waste in the world. World Bank data showed the Southeast Asian nation as the third-largest contributor of mismanaged plastic in the ocean annually.

The proposed plastic tax is part of the Marcos administration’s legislative wishlist for the 20^th Congress. A similar measure was approved on final reading by the House in 2022, but a counterpart bill at the Senate failed to be approved.

Finance Undersecretary Karlo Fermin S. Adriano said the proposal is primarily not a tax bill but an environmental measure, aimed at curbing the widespread use of plastic bags in one of the world’s most plastic‑reliant and heavily polluted countries.

Plastic pollution costs the government about PHP 70 billion per year, he added. “What we’re going to collect, if we follow a PHP 100-per-kilogram excise tax, is only around PHP 8 billion.”

“The revenue we’re going to collect from the excise tax is significantly smaller than the current economic cost of plastic pollution,” Mr. Adriano told lawmakers at the same briefing.

But there is no alternative to plastics as a major packaging material that is both cheaper and more reliable,” Joseph R. Fabul, director of the Philippine Chamber of Food Manufacturers, said.

“There is no commercially viable large-scale alternative that matches the safety barrier and logistics functions at comparable costs,” Mr. Fabul told the same hearing.

Mr. Adriano said the plastic tax measure’s intent is for producers to pass the levy onto consumers to curb the use of plastics.

“It will be burdensome, particularly for the poor,” said Mr. Adriano. “But we would also like to note that this income decile is the most vulnerable to climate change and its impact. When there are floods, they are the ones who cannot recover.”

The Philippines is among the world’s most disaster-prone countries, with storms and monsoon rains routinely inundating towns and cities. The Southeast Asian nation was hit by 22 storms this year, with a series of strong typhoons in late October leaving hundreds dead and causing billions of pesos in damage.

“That’s why we are imposing this excise tax, so that consumers in general will internalize the cost of all these environmental effects and impacts,” Mr. Adriano said.

The DoF is looking to expand the type of plastics covered under the proposed measure, he added. “Previously, the proposal only covered plastics, specifically sando bags and labo bags.”

“We’re just finalizing the details, like the design, which includes, among others, the tax rate and the coverage,” he said.

The House Ways and Means Committee has formed a technical group to refine the bill’s provisions, particularly the tax rate and plastic type coverage, panel chairman and Marikina Rep. Romero S. Quimbo said.

Analysts said the proposal could stoke inflation in the short term, as many basic commodities rely on plastic for packaging.

However, John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said prices of items that use plastic packaging will likely go up due to the excise tax.

“The tax would raise the cost of plastic-packaged goods, and firms may pass on part of that cost to consumers especially for items like bottled drinks, sachet products and convenience foods,” he said in a Viber message. “However, the overall impact on inflation may be small, since the tax targets only a narrow segment of goods and consumers can shift to cheaper, reusable, or non-plastic alternatives.”

“In the long term we may expect a shift towards sustainable packaging, especially if competition calls for it,” Reinielle Matt M. Erece, an economist at Oikonomia Advisory & Research, Inc., said in a Viber message. “This shift is good both for the environment as well as economically.” — Kenneth Christiane L. Basilio, Reporter

Philippine factory activity fell sharply in November — the steepest drop in over four years — as output and new orders declined amid weather disruptions.

S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) slumped to 47.4 in November, a reversal from the 50.1 in October.

In a report, S&P Global said this signaled the “strongest deterioration” in operating conditions in the Philippine manufacturing sector since the 46.4 reading in August 2021.

“Output and new orders contracted at their fastest rates since August 2021, driven by weak customer demand. Exports, purchasing and employment also declined, reflecting broader challenges in the sector,” Trevor Balchin, economics director at S&P Global Market Intelligence, said.

The headline PMI is a composite indicator of manufacturing performance. A PMI reading below 50 indicates an overall deterioration in operating conditions compared to the previous month, while a reading above 50 indicates better operating conditions.

The Philippines was the only country in the Association of Southeast Asian Nations (ASEAN) that saw a deterioration in manufacturing activity in November. ASEAN PMI rose to 53 in November from 52.7 in October, as new orders and production further accelerated.

Based on S&P ASEAN PMI data, Thailand recorded the highest PMI reading at 56.8, followed by Vietnam (53.8), Indonesia (53.3), Myanmar (51.4), and Malaysia (50.1).

In August, the US began imposing a 19% reciprocal tariff on many goods from the Philippines, Cambodia, Malaysia, Thailand and Indonesia.

S&P Global said Philippine manufacturers saw new orders drop for a third straight month, and at the fastest rate since August 2021. This was attributed to “weak customer demand and reduced requirements due to product life cycle changes.”

It noted new export orders fell for the second straight month, and at steepest pace since September 2024.

“Production followed the same trend as new orders in November, falling for the third month running and at the fastest rate since August 2021. Many businesses also noted that the typhoon had caused disruptions to business activities,” it said.

S&P Global said the sharp drop in new orders led to a decline in purchasing activity for a second month in a row. This prompted firms to reduce their inventory for the first time in five months.

“The rate of destocking was the fastest in just over five years. Meanwhile, suppliers’ delivery times were shortened for the first time since April 2024, albeit only slightly,” it added.

Manufacturers also reduced staff for the first time since May.

“The overall rate of job shedding was only marginal, but the fall was linked to layoffs and the non-renewal of contracts. Backlogs rose for the first time in three months, and stocks of finished goods were depleted at the fastest rate in nearly a year,” S&P Global said.

Inflationary pressures were subdued in November, mainly due to lower demand for raw materials.

“Input price inflation eased to a four-month low, remaining well below the long-term trend, while output prices rose slightly,” Mr. Balchin said.

Despite the decline in new orders, manufacturers were confident of output growth over the next 12 months. S&P Global noted that overall sentiment was the strongest since November 2024.

“There were signs of promise, however, as manufacturers expressed increased optimism for the next 12 months, anticipating growth due to new projects and improved economic conditions,” Mr. Balchin said.

“Overall, while the manufacturing sector faces immediate challenges, the outlook suggests cautious optimism for growth moving forward,” he added.

Meanwhile, analysts said the slump in manufacturing activity can be attributed to the typhoons and earthquakes that hit parts of the country in November.

S&P Global Market Intelligence Economics Associate Director Jingyu Pan said the decline in local factory output in November is likely temporary, driven by severe weather rather than a broader weakening in demand.

“As we delve into the comments coming through from manufacturers from whom we collect the survey responses, it does appear that the back-to-back typhoons that has hit in November has actually really been quite impactful for the Philippines,” she said in an interview on Money Talks with Cathy Yang on One News on Monday.

The multiple storms that hit the country have slowed demand and disrupted factory operations, she said.

Ms. Pan said she expects factory activity to recover in December as the impact of weather disruptions dissipate.

“Still relatively softer local manufacturing PMI still largely attributed to the weather-related disruptions particularly the spillover effects of the series of storms and earthquakes that reduced working days for some local manufacturers, thereby reducing their production,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.

Mr. Ricafort said November is usually the tail end of seasonal importation and production ahead of the holiday period.

He also noted the peso’s slide to a record low last month raised import costs, though this was partly offset by the Bangko Sentral ng Pilipinas’ recent rate cut.

John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said some firms may have scaled back production due to recent economic uncertainty and the slowdown in government projects.

“Some manufacturers are also adjusting inventories more cautiously as they wait for clearer signals on demand heading into 2025,” he said.

Mr. Rivera warned that the slowdown in manufacturing could continue in December and early 2026 if business confidence remains weak and the peso remains volatile.

“But a recovery is still possible if holiday spending gives a short-term boost and if government spending normalizes soon. Firms will continue to be cautious until they see stronger, more stable demand and a clearer policy environment,” he said.

Meanwhile, Economy Secretary Arsenio M. Balisacan said the Philippine manufacturing sector continues to grapple with high business costs, particularly due to infrastructure gaps.

“We talked about digital connectivity, but also our physical infrastructure, transport, power. We have those challenges. That’s why in the last couple of years, our task was to increase the level of spending on our infrastructure, particularly quality infrastructure,” he said at a year-end press chat on Monday.

Another hurdle for the government is ensuring efficient use of funds, noting that 5-6% of gross domestic product may not be reaching intended projects due to corruption. — Aubrey Rose A. Inosante, Reporter

The Philippines is unlikely to hit even the low end of the government’s growth target this year, as bad weather and a corruption scandal weigh on economic activity, Department of Economy, Planning, and Development (DEPDev) said on Monday.

Economy Secretary Arsenio M. Balisacan conceded that this year’s 5.5-6.5% gross domestic product (GDP) growth target is out of reach.

“Honestly, that’s very unlikely now. We need to grow roughly 7% in the fourth quarter to achieve a 5.5% growth for the year. Given the situations and data that are coming out, that’s quite unlikely,” he said in a year-end press chat.

This will be the third straight year that the Philippines will miss its GDP growth target.

Mr. Balisacan said the Development Budget Coordination Committee (DBCC) is set to meet on Dec. 9 to review the macroeconomic assumptions and targets.

“Our DBCC is meeting to assess the situation, particularly given the recent developments in the third-quarter performance and what’s emerging in the fourth quarter. Those will be taken into account in setting a target for 2026,” he said.

The Marcos administration has been under pressure after a corruption scandal involving public works projects has dampened government spending and shaken investor and consumer confidence.

Third-quarter GDP grew by 4%, the slowest in over four years, bringing the nine-month average to 5%.

Last month, S&P Global Ratings cut its 2025 growth forecast to 4.8%, while the ASEAN+3 Macroeconomic Research Office trimmed its projection to 5.2%.

Mr. Balisacan said he is hoping the economy has seen the worst in the third quarter as President Ferdinand R. Marcos, Jr. instructed agencies to ramp up their spending.

However, he said the full-year GDP growth may still reflect cautious spending by infrastructure-related agencies in the fourth quarter, although the impact is expected to be less pronounced than in the third quarter.

Mr. Balisacan said the nine-month average growth of 5% is still “quite respectable.”

“That still places us something like in the middle of the pack among our neighbors. But hopefully, our intention is to move back to the top tier of these Asian countries next year,” he said.

Even though economic growth may have slowed, Mr. Balisacan said the Philippines remains one of the best-performing economies in the region.

“Don’t be misled by just looking at one quarter, because the economy goes through cycles. We are probably in this part of the cycle, and obviously instigated by these developments related to our governance issues,” he said.

Mr. Balisacan also said major political uncertainty is a deterrence to economic growth but noted that the rule of law needs to be respected.

“We have a constitution. We have rule of law. And we need to abide by those rules. Otherwise, the investing community and the public will not see certainty in the future,” he said.

Amid the flood control controversy, Mr. Balisacan said DEPDEv’s Regional Project Monitoring Committees have already validated 9,290 of 9,855 flood control projects nationwide through the Rapid On-Site Verification Report (ROVeR). The final reports will be submitted to the Office of the President.

He said the DEPDEV is preparing an executive report to guide the administration in navigating governance challenges and the path forward in 2026.

“This report will feature economic analysis, scenarios and policy options, as well as strategic proposals for institutional strengthening to protect our economy’s hard-won gains,” he said.

The document will be released to the public after discussions with the President and Cabinet.

2026 Asean chairmanship

Meanwhile, Mr. Balisacan expects a surge in tourism when it assumes the chairmanship of the Association of Southeast Asian Nations (ASEAN) in 2026.

“We surely take advantage of that position of being the chair because the attention of the world will be with us, focus on us, so we need to seize that moment of opportunity,” he said.

He said the government is aligning infrastructure programs to meet the “experiential needs” of visitors, aiming to bolster confidence in the country as a destination for tourists and investors.

Mr. Balisacan clarified that these infrastructure projects for the 2026 ASEAN Summit had no delays and were planned two years ago.

“The projects, particularly transport projects, most of these are ODA (official development assistance)-funded, and ODA projects were not affected at all by these controversies. There were no delays in the implementation of these projects,” he said.

Economy Undersecretary Rosemarie G. Edillon said hosting major international events has historically lifted the country’s growth.

“We hosted the APEC (Asia-Pacific Economic Cooperation), and we saw that the sectors of transport, communication, hotel, restaurant and accommodation, and then the export of services, which is really to do with international travel, actually grew double digits at that time,” she said in the same panel.

UMIC status

The Philippines is still on track to graduate to upper middle‑income country status (UMIC) next year, Mr. Balisacan said.

However, this will depend on the World Bank which may set new thresholds in July 2026, as well as the exchange rate, inflation and exchange rate, he added.

The World Bank’s latest country income classification showed the Philippines remained a lower middle-income country with a gross national income (GNI) per capita of USD 4,470. This was higher than its GNI per capita of USD 4,230 in the previous year.

The World Bank classifies a country as lower middle-income if the GNI per capita level is betweenUSD 1,136 and USD 4,495.

The Philippines’ GNI per capita was only USD 26 shy of the World Bank’s adjusted GNI per capita requirement of USD 4,496 to USD 13,935 to become a UMIC. — Aubrey Rose A. Inosante