THE country’s debt-to-gross domestic product (GDP) ratio worsened following the disappointing third-quarter economic growth print.
The national government (NG) debt-to-GDP ratio — a measure of debt sustainability — climbed to 66.9 percent, up from 66.0 percent three months earlier. This is higher than the 64.9 percent target of the government for the year.
The national government's outstanding debt climbed to a record P19.66 trillion at the end of September 2026, increasing by P53.47 billion from the previous month.
The latest debt stock was 0.27 percent higher than the P19.61 trillion recorded at the end of August. It also marked an 11.03-percent increase, equivalent to P1.95 trillion, from the P17.71 trillion recorded at the end of 2025.
Domestic obligations accounted for 67.39 percent of the total debt, amounting to P13.25 trillion, while external debt made up the remaining 32.61 percent, or P6.41 trillion.
Philippine Institute for Development Studies (PIDS) senior fellow John Paolo Rivera said the ratio is “concerning” due to slower economic growth that makes it “more difficult to stabilize the debt burden.”
GDP growth markedly slowed to 2.1 percent in the third quarter, down from the 2.3 percent recorded three months earlier and 4.0 percent in the same period last year.
Rivera said that the continued increase in debt-to-GDP suggests that “fiscal space is becoming increasingly constrained, with potentially greater pressure on government resources for debt servicing and essential public services.”
“There is no single debt threshold that automatically signals a fiscal crisis,” Rivera said.
“What matters is whether economic growth, government revenues and borrowing costs remain consistent with debt sustainability,” he added.
Rivera said that the continued increase in debt alongside weak growth and elevated interest payments would “warrant closer attention.”
