PH opens 2025 with record-high P16.31 trillion sovereign debt

The Philippines has opened 2025 with a new record-high sovereign debt of more than P16 trillion as of the first month of the year, according to data released by the Bureau of the Treasury (BTr).

The national government's outstanding debt reached P16.31 trillion as of end-January 2025, up 1.63% from P16.05 trillion as of end-December 2024.

"This level remains manageable and in line with the government's target to support economic development while ensuring fiscal sustainability," the Treasury said.

The country ended 2024 with a debt-to-gross domestic product (GDP) ratio of 60.7%, slightly above the internationally accepted comfortable debt-to-GDP ratio of 60%.

Debt-to-GDP ratio measures the amount of the national government's outstanding debt proportionate to the value of the economy during a specific period.

A lower debt-to-GDP ratio indicates that the country can pay off its debt without having adverse impacts on the economy.

The BTr said the month-on-month increase in the sovereign debt stock "was due to the net incurrence of new domestic and external debt."

The Treasury also attributed the national government debt's rise to the impact of peso depreciation against the US dollar "from P57.847[:$1] at the end of 2024 to P58.375[:$1] at the end of January 2025."

The Philippines' debt stock remains to be largely sourced locally, with domestic debt accounting for 67.9% while foreign obligations comprise 32.1%.

The end-January domestic debt stood at P11.08 trillion, up 1.41% from P10.93 trillion as of end-December 2024.

"This was mainly due to the net issuance of government securities of P152.17 billion as gross issuances of P270.01 billion exceeded repayments of P117.84 billion to partly finance the projected deficit for the quarter," the Treasury said.

"Meanwhile, the valuation effect of local currency depreciation against the US dollar added P1.51 billion to the January debt total," it added.

The national government's foreign debt, on the other hand, grew by 2.1% to P5.228 trillion from P5.12 trillion month-on-month.

"This was driven by net availment of foreign loans amounting to P59.30 billion, as well as the upward revaluation caused by unfavorable US- and third-currency movements amounting to P46.74 billion and P1.75 billion, respectively," the BTr said.

Finance Secretary Ralph Recto earlier said the country's sovereign debt could balloon to as much as P20 trillion by the end of President Ferdinand "Bongbong" Marcos Jr.'s term in 2028.

The Finance chief, nonetheless, said that while the nominal debt continues to rise, the country's economic growth would outpace the increase in debts.

Recto had said the Philippine economy could reach a value of P37 trillion by 2028, versus a projected debt stock of P20 trillion. — VDV, GMA Integrated News