The Bureau of the Treasury reported that the National Government’s (NG) total outstanding debt remains at a manageable PHP 16.68 trillion as of end-March 2025, marking a modest 0.31% increase from the previous month. This development underscores the government’s prudent fiscal management, buoyed by a strong revenue performance in the first quarter of 2025.
The NG’s robust revenue collection has enabled the Marcos, Jr. administration to finance key priority programs without the need for new taxes, effectively keeping debt growth within sustainable levels. This fiscal discipline is further evidenced by the country’s economic growth outpacing its debt obligations, positioning the Philippines firmly on track to achieve its target of reducing the debt-to-GDP ratio to below 60% by 2028. The debt-to-GDP ratio stood at 60.7% in 2024, a notable improvement from the approximately PHP 12.79 trillion debt inherited due to the pandemic.
Recent credit rating upgrades and reaffirmations from international agencies reflect strong investor confidence in the Philippine economy’s sound fundamentals. This positive sentiment has translated to increased demand for Philippine bonds, ensuring the government maintains access to reasonable borrowing costs, which is crucial for sustaining the nation’s inclusive growth momentum.
As of end-March 2025, the composition of the NG debt stock remains strategically weighted towards domestic sources, comprising 68.2% (PHP 11.38 trillion) of the total, while external obligations accounted for 31.8% (PHP 5.30 trillion). This financing mix demonstrates a cautious approach to debt management, mitigating exposure to external risks by leveraging the Philippines’ liquid domestic market.
Domestic debt saw a 1.39% (PHP 155.83 billion) increase from end-February 2025, primarily driven by the net issuance of domestic securities amounting to PHP 157.86 billion, indicating strong domestic investor appetite for government instruments. This increase was partially offset by a PHP 2.03 billion downward revaluation due to the peso’s continued appreciation.
Conversely, the NG’s external debt decreased by 1.92% (PHP 103.87 billion) from the previous month. This reduction was mainly attributed to the peso’s strengthening against the US dollar, resulting in a PHP 66.22 billion decrease in the peso equivalent of US dollar-denominated debt, coupled with net repayments of external loans totaling PHP 60.84 billion. These positive effects more than offset the PHP 23.19 billion upward revaluation due to the movement of third currencies against the US dollar.
NG guaranteed obligations also saw a decrease of 0.37% (PHP 1.25 billion) to PHP 339.86 billion at the end of March 2025. This decline was primarily due to net repayments of external guarantees amounting to PHP 1.29 billion and a PHP 1.13 billion downward revaluation resulting from the peso’s appreciation. These factors outweighed the PHP 0.77 billion in additional domestic guarantees and the PHP 0.40 billion impact of third-currency exchange rate movements on external guarantees, reflecting the government’s ongoing commitment to prudent management of contingent liabilities while supporting key development initiatives.
A significant 91.5% of the outstanding debt carries fixed interest rates, providing a buffer against potential volatility in global interest rates and currency movements. Furthermore, 81.3% of the obligations are long-term, affording the government ample fiscal space and time to strategically allocate resources towards growth-enhancing investments.
The Marcos Jr. administration’s commitment to fiscal consolidation, as outlined in the Medium-Term Fiscal Framework (MTFF), aims to further reduce the NG debt-to-GDP ratio to 56.9% by 2028, building upon the progress made in 2024 through economic expansion, which saw the country’s GDP reach PHP 26.44 trillion.
The Bureau of the Treasury stated, “These figures demonstrate the effectiveness of our administration’s fiscal strategy. Our focus on revenue generation, coupled with prudent debt management, ensures that we can continue to invest in the Filipino people without burdening future generations with unsustainable debt levels. The strong investor confidence, reflected in our recent credit ratings, further validates our commitment to economic stability and growth.”
