THE NATIONAL GOVERNMENT’S (NG) outstanding debt ballooned to a record P17.56 trillion at the end of July, breaching its full-year projection for 2025, data from the Bureau of the Treasury (BTr) showed.
The latest data from the BTr showed outstanding debt surged by 11.9% from P15.69 trillion in July 2024.
This was already 1.15% higher than the P17.36-trillion projected debt by end-2025.
Despite surpassing the 2025 projection, the Treasury said the debt stock is expected to decline by yearend as the government pays off P814.2 billion in domestic bonds by December and as “fundraising activities wind down.”
Month on month, NG debt inched up by 1.7% from P17.27 trillion in June, 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.
“To mitigate exposure to foreign exchange risk, the government continued to favor domestic borrowings to deepen the local capital market, attaining a financing blend comprised of 76% domestic financing and 24% external borrowing in the first seven months of the year,” the Treasury said.
“As a result, the domestic component of the debt stock improved to 68.9% at the end of July from 68.1% at the end of 2024.”
Domestic borrowings increased by 12.6% to P12.11 trillion as of end-July from P10.75 trillion in the same month last year.
This was already 0.52% higher than the P12.04-trillion year-end domestic debt projection.
Month on month, domestic borrowings slightly went up by 1.3% from P11.95 trillion at end-June.
Domestic borrowings were made up mostly of government securities.
On the other hand, external debt rose by 10.5% to P5.46 trillion as of end-July from P4.94 trillion a year ago. This also exceeded the P5.32-trillion external debt projection this year by 2.63%.
Month on month, external debt inched up by 2.6% from P5.32 trillion at end-June.
Foreign debt was composed mainly of P2.79 trillion in global bonds and P2.67 trillion in loans.
External debt securities were made up of P2.37 trillion in US dollar bonds, P252.46 billion in euro bonds, P58.5 billion in Japanese yen bonds, P58.19 billion in Islamic certificates and P54.77 billion in peso global bonds.
As of end-July, the NG-guaranteed obligations rose by 2.4% to P352.97 billion from P344.79 billion a year ago.
Month on month, it also edged higher by 2.3% from the end-June level of P345.11 billion.
“The Marcos, Jr. administration remains steadfast in its commitment to prudent debt management by leveraging strong investor confidence in peso-denominated securities while ensuring that borrowings are at the lowest possible cost and support fiscal sustainability, inclusive growth, and a stronger Philippine economy,” the Treasury said.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said debt rose as the government ramped up borrowings to plug the widening budget gap.
From January-to-July period, the fiscal deficit widened by 22.04% to P784.4 billion amid faster state disbursements. This was on track to hit the revised P1.56-trillion full-year deficit ceiling, the BTr said.
“(The debt) could possibly breach above P18 trillion by end-2025 at the rate of the year-to-date increase if not curbed through narrower budget deficits in the coming months,” Mr. Ricafort said.
However, he noted that this could be partially offset by the settlement of large maturing NG obligations, particularly in August and September.
“This (rising debt) is concerning but not entirely unexpected given sustained borrowing needs, a weaker Philippine peso, and spending demands tied to infrastructure, subsidies, and tariff-related buffers,” Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera said in a Viber message.
Mr. Rivera said it will be likely that the NG debt level will exceed the year-end projection if current trends persist, such as “modest revenue growth” and “large spending needs such as flood control, defense, and infrastructure projects.”
Earlier, the Finance department projected outstanding debt to reach P19.1 trillion by 2026, rising to P20.5 trillion by 2027, P21.9 trillion by 2028, and P23.4 trillion by 2029. By 2030, outstanding debt is expected to reach P24.7 trillion.
At the end of the second quarter, NG debt as a share of gross domestic product surged to 63.1%, the highest since 2005. This is above the 60% debt-to-GDP threshold considered by multilateral lenders to be manageable for developing economies.
The DoF expects the debt-to-GDP ratio to ease to 61.3% by end-2025 and eventually fall to 58% by 2030. — Aubrey Rose A. Inosante
