THE NATIONAL GOVERNMENT’S (NG) outstanding debt jumped to a fresh high P17.27 trillion as of end-June, data from the Bureau of the Treasury (BTr) showed.
The latest data from the BTr showed outstanding debt rose by 11.5% from P15.48 trillion in the same month in 2024.
Despite hitting a fresh high, the Treasury said outstanding debt “remains sustainable.”
Month on month, NG debt inched up by 2.1% from P16.92 trillion in May due to “strong investor demand for government securities,” 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.
The bulk or 69.2% of the total debt was owed to domestic creditors, while the rest was owed to foreign creditors.
Domestic debt, which is composed of government securities, increased by 13% to P11.95 trillion as of end-June from P10.57 trillion in the same month last year.
Month on month, domestic borrowings rose by 1.4% from P11.78 trillion at end-May.
The BTr said it prioritizes domestic borrowings because it is “consistent with the government’s goal to boost the local capital market while lowering foreign exchange risks and building investor trust in Philippine-issued securities.”
On the other hand, external debt rose by 8.3% to P5.32 trillion as of end-June from P4.91 trillion a year ago. It also went up by 3.5% from P5.14 trillion in the previous month.
Foreign debt was composed mainly of P2.71 trillion in government securities and P2.6 trillion in loans.
External debt securities consisted of P2.29 trillion in US dollar bonds, P252 million in euro bonds, P59.32 billion in Japanese yen bonds, P56.38 billion in Islamic certificates and P54.77 million in peso global bonds.
As of end-June, the NG-guaranteed obligations “remained stable” and inched up by 0.4% to P345.11 billion from P343.65 billion a year ago.
“The year-to-date decline of P4.33 billion since end-2024 highlights continued efforts to manage contingent liabilities while supporting essential sectors,” the BTr said.
Month on month, it also increased by 0.4% from the end-May level of P343.58 billion.
“After the NG released a statement effectively raising the debt ceiling for the country, the new inflow of borrowings seems to be in line with their goal of further increasing their spending to drive growth and development,” Reinielle Matt M. Erece, an economist at Oikonomia Advisory and Research, Inc., said in a Viber message.
Earlier this month, Palace Press Officer Clarissa A. Castro said the Department of Finance considers 70% of gross domestic product (GDP) to be the international threshold for sustainable borrowing, as opposed to the 60% rule-of-thumb that multilateral banks often hold developing countries to.
NG debt as a share of GDP rose to 62% at the end of the first quarter, the highest in 20 years. This is a significant jump from the 60.7% posted at the end of 2024.
“The National Government’s prudent debt management approach strategy reflects the Marcos, Jr. administration’s commitment to safeguarding fiscal sustainability, supporting inclusive growth, and ensuring that every peso borrowed is used to build a stronger economy for the Filipino people,” the BTr said.
The NG’s outstanding debt is projected to reach P17.35 trillion by end-2025. — A.R.A.Inosante
