THE government’s outstanding debt reached a new record high at the end of last year on continued borrowings and the impact of a weaker peso, the Bureau of the Treasury reported on Tuesday.
At P17.71 trillion, outstanding debt grew by P1.66 trillion, or 10.32 percent, from P16.05 trillion a year earlier. It also exceeded the targeted P17.359 trillion cap for 2025.
“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 Treasury said in a statement.
The peso fell to P58.79 against the dollar from P57.847 over the year and also slid to P0.3753 from P0.3688 versus the yen, it noted.
Despite the new record high, the Treasury said the government’s debt portfolio remained resilient with the bulk, or 68.4 percent, having come from domestic sources.
“By prioritizing peso-denominated financing, which is predominantly held domestically, the government reduces exposure to exchange rate volatility,” it said.
“It also keeps interest payments within the domestic economy and provides Filipinos with a stable and secure investment option.”
Domestic debt increased to P12.12 trillion at the end of last year, up by P1.19 trillion, or 10.85 percent, and driven by securities auctions and a retail Treasury bond offering.
External debt, meanwhile, rose by P470.7 billion to P5.59 trillion via the issuance of new global bonds, availment of official development assistance and upward revaluations of foreign currency-denominated debt.
The government raised P1.18 trillion in net domestic financing for the entire year, which the Treasury said was a sign of continued investor confidence in government securities despite changing market conditions.
External financing remained “prudent and largely concessional,” it added, with the net external financing level of P317.02 billion from borrowings to support infrastructure, social reform, and agriculture and industries.
Guaranteed obligations fell by P2.09 billion or 0.60 percent to P344.57 billion by the end of 2025 amid net repayments of both domestic and external guarantees.
The Treasury said that guaranteed debt remained manageable, suggesting minimal contingent debt risks, at around 1.2 percent of gross domestic product.