Debt rises to fresh high of P16.75 trillion

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June 4, 2025 | 12:00am

MANILA, Philippines — The appreciation of the peso managed to slightly offset higher borrowings as part of the government’s fiscal program, but the country’s outstanding debt still inched up to a fresh high of P16.75 trillion as of April, the Bureau of the Treasury said.

Latest data from the Treasury showed that the national debt settled at P16.75 trillion as of end-April, its highest level to date.

This is also 11.6 percent higher than the P15.02 trillion debt in the same period last year.

For April alone, the government added some P68.69 billion to the debt pile, a modest 0.41 percent increase month-on-month.

According to the Treasury, the minimal increase in debt in April was minimized by the appreciation of the peso, thereby reducing the effect of additional borrowings in line with the fiscal program.

The Treasury said the country remains on track to achieve fiscal consolidation and reduce the debt ratio as a percentage of the economy to below 60 percent by 2028.

“The government continues to follow a disciplined debt strategy, ensuring that borrowings support productive investments while keeping fiscal sustainability,” the Treasury said.

As of end-April, 91.7 percent of the outstanding debt carries fixed interest rates, insulating the country from sudden shifts in global interest rates and currency movements.

Likewise, 82 percent of the obligations are long-term, giving the government ample fiscal space and time to support growth-enhancing investments.

Nonetheless, the outstanding debt is already 96.5 percent of the 2025 debt expectation of a record P17.35 trillion.

A majority or 69.2 percent of the debt pile were domestic borrowings and the remaining 30.8 percent were sourced externally.

Such a financing mix is still part of the administration’s prudent approach to debt management, to help mitigate exposure to external risks while taking advantage of the country’s liquid domestic market.

Data showed that total domestic debt, at P11.59 trillion, slightly went up by 1.85 percent on a monthly basis and jumped 12.44 percent from P10.31 trillion in debt in April 2024.

The increase was due to the P211.02 billion in net domestic financing, which the Treasury said was supported by strong demand for government securities, including P300 billion in benchmark bonds.

“This reflects investors’ sustained confidence in the government’s fiscal program. With economic fundamentals remaining sound, the country continues to enjoy strong market access at reasonable rates,” it said.

The peso appreciation likewise contributed to a P3.85-billion reduction in the overall domestic debt valuation, helping temper the increase.

External obligations, on the other hand, slipped by almost three percent to P5.16 trillion month-on-month. It grew by 10 percent from P4.71 trillion on a yearly basis.

The Treasury said the reduction is attributed to the P124.74-billion decrease in the peso equivalent of dollar-denominated debt behind local currency appreciation.

There was also a net repayment of external loans, which further trimmed the external debt total by P58.28 billion.

Meanwhile, the government’s guaranteed obligations went down to P337.54 billion, driven by the net repayment of domestic guarantees totaling P1.75 billion and the P2.14 billion downward revaluation from the strong peso.