Weak peso fuels government debt to P17.56 trillion

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December 3, 2025 | 12:00am

MANILA, Philippines — The country’s outstanding debt exceeded this year’s full-year projection by more than P200 billion following the peso’s record-low performance against the dollar.

Based on the latest data from the Bureau of the Treasury, the national government’s outstanding debt inched up by less than one percent to P17.562 trillion by end-October from P17.455 trillion as of end- September.

The foreign exchange rate used is 58.771 per dollar, higher than the rate used in September, which was 58.149.

While the current total debt is only 1.2 percent above the debt expectation, it is equivalent to P210 billion, pushing the figure above the full-year assumption of P17.35 trillion.

The October figure is behind the highest debt level recorded since July, when the Treasury reported a P17.563 trillion total debt.

“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 dollar,” the Treasury said.

The amount is also nearly 10 percent higher than the P16.02 trillion recorded in the same period last year.

National Treasurer Sharon Almanza previously told reporters that the recent performance of the peso will affect the revaluation of the foreign-currency debt portfolio, as the credit expectation is based on prior assumptions.

The projected P17.35 trillion debt assumes a foreign exchange rate of 56.5 to $1, based on the 2025 Budget of Expenditures and Sources of Financing.

“Peso depreciation against the dollar added P58.64 billion to the debt total, while peso appreciation against third currencies provided an offset of P32.54 billion,” the BTr said.

To limit foreign exchange risks, the government relied on domestic borrowing to help strengthen and expand the local capital market.

The debt stock was mainly funded through domestic borrowings at nearly 69 percent, while external borrowing accounted for 31 percent for the ten-month period this year.

BTr data showed that the total domestic debt level reached P12.05 trillion in October, a slight increase from P11.97 trillion in September.

Meanwhile, total external debt for October increased thinly to P5.52 trillion from P5.48 trillion the previous month.

“Domestic debt accounted for 68.6 percent of the total debt stock, consistent with the Treasury’s debt strategy of prioritizing local currency financing to mitigate foreign exchange risks and foster the development of the domestic bond market,” the BTr said.