Philippine NG debt hits record high P18.16 trillion in February

By Justine Irish D. Tabile, Senior Reporter

THE National Government’s (NG) outstanding debt hit a fresh high of P18.16 trillion as of end-February, reflecting a stable and well-managed debt position, the Bureau of the Treasury (BTr) said on Wednesday.

Latest data from the Treasury showed that the debt inched up by 0.14% from P18.13 trillion at the end of January.

Year on year, outstanding debt went up by 9.19% from P16.63 trillion at end-February 2025.

“The modest uptick underscores the government’s stable and well-managed debt position amid evolving global financial conditions,” the BTr said in a statement.

“This was largely driven by the continued prioritization of domestic financing to protect the government’s debt position from unfavorable external developments,” it added.

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 68.7% of the total debt stock came from domestic sources, while the rest were external borrowings.

“With domestic debt accounting for 68.7% of the total, the NG maintains a prudent debt profile that minimizes vulnerability to foreign exchange (forex) fluctuations,” BTr said.

Domestic debt, which was composed of government securities, rose by 1.25% to P12.48 trillion at end-February from P12.32 trillion at end-January, “as the government issued more securities amounting to P158.14 billion to raise funds for national development.”

Year on year, it jumped by 11.19% from P11.22 trillion in the same period.

“The impact of currency movements on foreign currency-denominated domestic securities remained minimal, reducing valuations by P3.75 billion,” it added.

Meanwhile, external debt dropped by 2.21% to P5.68 trillion as of end-February from P5.81 trillion at end-January.

However, external debt jumped by 5.03% from P5.41 trillion in February 2025.

BTr said that the drop is “primarily driven by favorable forex rate movements, which decreased the peso value of US dollar- and third currency-denominated obligations by a combined P136.43 billion.”

“These valuation gains more than offset net external loan availment amounting to P7.78 billion,” it added.

The peso closed at P57.665 against the dollar at end-February, appreciating by P1.195 from its P58.860-per-dollar finish at end-January.

External debt was composed of P2.93 trillion in global bonds and P2.75 trillion in loans.

“Despite the decline in external debt stock, the NG continued to access external financing strategically. As of end-February 2026, total external financing reached P203.10 billion, including the successful issuance of $2.75 billion in triple-tranche global bonds with tenors of 5.5, 10, and 25 years,” it said.

“This reflects sustained investor confidence in the country’s credit profile and the NG’s ability to tap international markets on reasonable terms.

Year-to-date, NG external debt rose by P88.98 billion, or 1.59%, from P5.59 trillion as of end December.

Meanwhile, NG’s guaranteed obligations increased by 10.11% to P379.98 billion as of end-February from P345.08 billion in the previous month.

“The increase was primarily driven by new guarantees extended to the Power Sector Assets and Liabilities Management (PSALM) Corp., which is partially offset by net repayments and favorable currency movements,” it said.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said that the increase in outstanding debt does not reflect yet the impact of the war in the Middle East, which started in March.

“But it could still partly reflect some government underspending since the latter part of 2025 due to the anomalous flood-control projects,” he said in a Viber message.

The minimal increase, he said, reflects the stronger peso exchange rate at P57 levels in February “which somewhat tempered the peso equivalent of external debts.”

For the coming months, Mr. Ricafort said the budget deficit is expected to widen amid an increase in government spending which would require more NG borrowings.

“Further, the record high US dollar-peso exchange rate above P60 recently could lead to a higher peso equivalent of foreign debt,” he said.

The Marcos administration projected the outstanding debt level to reach P19.06 trillion in 2026. Of this, around 70% or P13.28 trillion are domestic debt, while P5.78 trillion are external debt.