debt

THE PHILIPPINES’ outstanding debt climbed to a record P17.708 trillion at the end of 2025, exceeding the government’s projection amid increased issuances and a weaker peso.
The National Government’s (NG) end-2025 outstanding debt rose by 10.32% from the P16.05 trillion recorded in the previous year, according to data released by the Bureau of the Treasury (BTr) on Tuesday.
This was also 2% higher than the P17.36-trillion projected year-end level.
Month on month, the debt stock inched up by 0.34% from P17.65 trillion at end-November.
“The increase is due to the government’s strategic net issuance of debt instruments to fund development programs, as well as the valuation effects of peso depreciation against the US dollar and third currencies,” the BTr said in a statement.
The peso ended 2025 at P58.79 against the US dollar, weakening by 94.3 centavos or 1.63% from its P57.847 finish in 2024. It also fell against the euro, closing at P69.0547 from P59.9179 the prior year. Against the yen, it dropped to P0.3753 from P0.3688.
This brought the outstanding debt as a share of gross domestic product (GDP) to 63.2% as of end-2025, up from 60.7% a year earlier, the Treasury said.
This is the highest annual debt-to-GDP ratio in 20 years or since the 65.7% in 2005 and is above the 60% threshold considered by multilateral lenders to be manageable for developing economies.
This is also higher than the government’s end-2025 projection of a 61.3% ratio under its updated medium-term fiscal framework.
Philippine GDP growth slowed to 4.4% in 2025 from 5.7% in 2024 and missing the government’s 5.5%-6.5% target. This was the economy’s worst performance in five years or since the 9.5% contraction in 2020 due to the coronavirus pandemic. Outside of the pandemic, this was the weakest annual expansion since the 3.9% in 2011.
Despite the higher end-2025 debt level, the BTr said the country’s debt profile “remained resilient” as 68.4% of borrowings were from domestic sources.
“By prioritizing peso-denominated financing, which is predominantly held domestically, the government reduces exposure to exchange rate volatility. It also keeps interest payments within the domestic economy and provides Filipinos with a stable and secure investment option,” 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.
Broken down, domestic debt grew by 10.85% to P12.116 trillion as of December 2025 from P10.93 trillion at end-2024. This was 0.66% above the P12.04-trillion year-end projection.
The Treasury attributed the year-on-year increase to the net issuance of government securities via its regular auctions and an offering of five-year retail Treasury bonds in August, through which it raised P507.16 billion.
Month on month, domestic borrowings slipped by 0.1% from P12.117 at end-November.
Meanwhile, external liabilities rose by 9.19% to P5.59 trillion at end-2025 from P5.12 trillion in 2024. This was also higher than the P5.32-trillion estimate and also went up by 1.1% from P5.53 trillion at end-November.
“This is driven by the issuance of new global bonds, net availment of official development assistance from international development partners, as well as the upward revaluation of foreign currency-denominated debt brought about by unfavorable exchange rate movements,” the BTr said.
Outstanding foreign debt was composed of P2.82 trillion in global bond issuances and P2.77 trillion in loans.
External debt securities were made up of P2.39 trillion in US dollar bonds, P262.41 billion in euro bonds, P58.79 billion in Islamic certificates, P56.85 billion in Japanese yen bonds, and P54.77 billion in peso global bonds.
The government raised $4.5 billion from the international market last year as it issued US dollar-denominated global bonds, raising $2 billion in May and $2.5 billion in August.
“For the full year, the NG raised P1.18 trillion in net domestic financing, demonstrating sustained investor confidence in government securities amid evolving market conditions,” the BTr said.
“External financing remained prudent and largely concessional. This results in a net external financing level of P317.02 billion from global bond issuances and program and project loans to support infrastructure, social reform, and agriculture and industry sectors,” it added.
Meanwhile, NG-guaranteed liabilities slipped by 0.6% to P344.57 billion at end-December from P346.66 billion in the previous year due to net repayments of both domestic and external guarantees.
“Guaranteed debt remained manageable at only around 1.2% of GDP, indicating minimal contingent debt risks,” the BTr said.
Month on month, guaranteed debt dipped by 3.22% from P356.04 billion at end-November.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the higher debt stock at end‑2025 reflected an increase in borrowings to finance a bigger budget gap. The government’s budget deficit widened to P1.26 trillion in the first 11 months of 2025 from the P1.18-billion gap in the same period in 2024.
“For the coming months, the outstanding National Government debt could go to new record highs amid new National Government borrowings in recent months and also the need to hedge both local and foreign borrowings of the National Government in view of the Trump factor and other geopolitical risk factors,” he said.
Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said the record-high debt shows that the government’s fiscal space is tightening.
“We need faster revenue growth, stronger spending discipline, and reforms that boost productivity,” he said in a Viber message.
Mr. Ravelas added that a weaker peso, which drives up the value of the government’s obligations, will remain a challenge in the months ahead.
Based on the 2026 Budget of Expenditures and Sources of Financing, the outstanding debt is projected to balloon to a record P19.06 trillion by the end of 2026, or P13.28 trillion in domestic obligations and P5.78 trillion in external liabilities. The Marcos administration plans to borrow P2.68 trillion this year, or P2.05 trillion from the domestic market and P627.1 billion from external sources.
The government expects the debt-to-GDP ratio to settle at 61.8% this year, 61.3% in 2027, 60.3% in 2028, 59.5% in 2029, and 58% by end-2030.
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U.S. investment-grade corporate bond sales surged 12% YoY in January, reaching $208.4 billion — the largest January issuance ever recorded.

To put this in perspective:

Only four months in history saw higher issuance: March–May 2020 and March 2022
This is just the 6th time ever that monthly issuance has crossed the $200B mark
The 6-year January average sits much lower at $153.5B
The impact isn’t limited to the U.S. alone. Heavy borrowing is pushing a global debt wave, with total public bond issuance up 11% YoY, hitting a record $930B in January.

What it signals:
Corporations are locking in funding aggressively — a classic sign of uncertainty around future rates, liquidity, and economic conditions.

Debt is rising fast. Markets should pay attention.

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