NG debt rises to P18.55 trillion in May

NATIONAL GOVERNMENT (NG) debt rose in May as it continued to raise funds to support financing needs, the Bureau of the Treasury (BTr) said. 

The latest data from the Treasury showed that outstanding debt stood at P18.55 trillion as of end-May, inching up by 0.41% from the previous month’s level of P18.47 trillion. 

“The increase was primarily driven by the net incurrence of domestic securities as the government continued to raise funds to support financing needs, despite the ongoing Middle Eastern conflict,” the BTr said in a statement on Thursday.

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

The Treasury noted the local currency strengthened by 3.9 centavos against the dollar to P61.501 as of end-May from P61.54 as of end-April.

Year on year, outstanding debt went up by 9.62% from P16.92 trillion at end-May 2025.

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 67.37% of the total debt stock came from domestic sources, while the rest were from external sources.

“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,” the Treasury said.

Domestic debt, which was composed of government securities, inched up by 0.65% to P12.5 trillion at end-May from P12.42 trillion at end-April.

According to the BTr, the month-on-month increase in domestic debt was “mainly due to P80.23-billion net issuance of government securities, while the peso appreciation trimmed P0.11 billion from onshore dollar bonds valuation.”

Year on year, domestic debt jumped by 6.07% from P11.78 trillion.

Meanwhile, external debt dipped by 0.07% to P6.051 trillion as of end-May from P6.055 trillion at end-April.

Year on year, it jumped by 17.77% from P5.14 trillion.

The BTr said the drop in the external debt is due to the significant peso appreciation against the US dollar and other foreign currencies.

“The favorable downward valuation effect of P18.91 billion outweighed the P14.9 billion in net external debt availment,” it added.

External debt was composed of P3.05 trillion in global bonds and P3 trillion in loans.

The NG’s guaranteed obligations jumped by 15.73% to P443.5 billion as of end-May from P383.23 billion in the previous month.

“This was partially offset by favorable revaluation effects on external guarantees, amounting to P60 million for local currency-denominated guarantees and P750 million for third currency-denominated guarantees,” it said.

The Treasury also cited repayments of external guarantees worth P530 million.

Year on year, guaranteed obligations surged by 29.08% from P343.58 billion.

“The increase in outstanding debt to P18.55 trillion is not surprising given the government’s ongoing financing needs for infrastructure, social programs, and economic development,” Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas told BusinessWorld.

He said the more important metric is whether the economy is growing fast enough to support the debt, rather than the debt’s absolute size.

“I expect debt levels to continue rising in the coming months as the government funds its budget requirements and refinances maturing obligations,” Mr. Ravelas said.

“However, markets will be watching the debt-to-gross domestic product (GDP) ratio rather than the absolute debt level,” he added.

The NG’s outstanding debt is projected to reach P19.06 trillion by end-2026 under the Budget of Expenditures and Sources of Financing 2026.

The debt-to-GDP ratio stood at 65.2% in the first quarter, up from 60.7% a year earlier and its highest level since the 65.7% recorded in 2005.

This also exceeded the government’s 2026 target range of 60% to 63% under the Philippine Development Plan 2023-2028 Midterm Update Results Matrices released in May. — Justine Irish D. Tabile