PH ends 2025 with record ₱17.71 trillion debt

The Philippines closed 2025 with a fresh record-high sovereign debt pile of P17.71 trillion amid the government’s fundraising efforts to fund budgetary requirements, coupled with valuation effects of the peso’s depreciation against major currencies.

Data released by the Bureau of the Treasury (BTr) on Tuesday showed that the end-December 2025 outstanding national government debt grew by 10.32% or P1.66 trillion from the end-December 2024 level of P16.05 trillion.

The end-2025 debt pile also surpassed the government’s borrowing ceiling of P17.36 trillion.

“The increase 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 Treasury said.

It noted that the local currency depreciated against major currencies from its end-2024 to end-2025 levels – including the US dollar from P57.847:$1 to P58.79:$1, Euro from P59.9179:€1 to P69.0547:€1, and Japanese yen from P0.3688:Y1 to P0.3753:¥1.

The BTr said the Philippine government’s debt mix remained resilient with the majority or 68.4% of borrowings sourced locally.

“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,” the Treasury said.

In particular, domestic debt rose to P12.12 trillion, up by 10.85% from P10.93 trillion as of end-2024 on the back of the net issuance of government securities at regular auctions and the offering of Retail Treasury Bond Tranche 31.

In a commentary, Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort said the issuance of new government securities arose from the need for additional national government borrowings to finance the wider budget deficit in recent months that fundamentally required additional borrowings by the national government.

Ricafort also said the increase in debt value was partly due to the weaker peso which resulted from “recent political noise.”

External or foreign debt, on the other hand, stood at P5.59 trillion, up by 9.19% from P5.12 trillion as of end-2024.

“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 Treasury said.

For this year, the country’s sovereign debt is expected to rise to P19.057 trillion, according to the Budget of Expenditures and Sources of Financing (BESF) for fiscal year 2026.

Then Finance Secretary Ralph Recto, now the Executive Secretary, earlier said the country’s debt stock could balloon to as much as P20 trillion by the end of President Ferdinand Marcos Jr.’s term in 2028. — JMA, GMA Integrated News