Government debt piles up to record P18.55 trillion

As of end-May

MANILA, Philippines — The Marcos administration’s outstanding debt climbed to P18.55 trillion as of end-May, lifted by fresh domestic borrowings to cover funding needs amid the ongoing war in the Middle East, although the appreciation of the peso against the dollar helped temper the increase, the Bureau of the Treasury said.

BTr data showed that the latest debt stock was 0.41 percent higher than the previous month’s P18.47 trillion and was 9.6 percent more than the P16.92 trillion in the same period in 2025.

As such, the current debt pile is now around 97 percent of the expected P19.06 trillion debt by end-2026.

“The increase was primarily driven by the net inflow of domestic securities as the government continued to raise funds to support funding needs, despite the ongoing Middle Eastern conflict,” the Treasury said.

“Meanwhile, the appreciation of the peso against the dollar and other foreign currencies helped temper the increase,” it added.

The peso appreciated against the dollar in end-May, settling at 61.501 from 61.540 to $1 as of end-April.

The bulk, or 67.4 percent, of the debt pile consisted of domestic borrowings, while the remaining 32.6 percent was sourced externally.

“This reflects the government’s prudent debt management strategy of prioritizing domestic financing to support local capital markets, while reducing exposure to foreign exchange risks,” it said.

BTr data also showed that domestic debt, which comprises government securities, at P12.5 trillion as of end-May, went up by 0.7 percent from P12.42 trillion as of end-April.

“This is mainly due to P80.23 billion net issuance of government securities, while the peso appreciation trimmed P110 million from onshore dollar bonds valuation,” the BTr said.

Year-on-year, debt sourced locally increased by 6.1 percent from P11.78 trillion in the same period in 2025.

On the other hand, external obligations contracted marginally by 0.07 percent to P6.05 trillion as of end-May, from P6.06 trillion, due to significant peso appreciation against the dollar and other foreign currencies.

“The favorable downward valuation effect of P18.91 billion outweighed the P14.90 billion in net external debt availment,” the BTr said.

Despite the decline, external loans surged by 17.8 percent from P5.14 trillion as of end-May 2025.

Total debt guaranteed obligations went up by 15.7 percent to P443.5 billion as of end-May. Year-on-year, it rose by 29.1 percent from P343.58 billion.a