Government debt rises to PHP 18.55 trillion

By Francis Allan L. Angelo

The national government’s outstanding debt rose to PHP 18.55 trillion as of end-May 2026, up 0.41%, or PHP 76.11 billion, from PHP 18.47 trillion a month earlier, the Bureau of the Treasury said.

The increase was driven mainly by the net incurrence of domestic securities as the government continued raising funds for financing needs despite the ongoing Middle East conflict, while the peso’s appreciation against the U.S. dollar and other currencies helped temper the rise, the Treasury said.

Domestic borrowings continued to account for the bulk of the debt stock at 67.37%, while external obligations made up 32.63%, reflecting the government’s strategy of prioritizing domestic financing to support local capital markets and reduce foreign exchange risk.

Domestic debt climbed to PHP 12.50 trillion, up 0.65%, or PHP 80.12 billion, from end-April, mainly due to PHP 80.23 billion in net issuance of government securities.

The peso’s appreciation trimmed PHP 0.11 billion from the valuation of onshore dollar bonds.

From end-December 2025, domestic debt increased by 3.13%, or PHP 379.26 billion, from PHP 12.12 trillion, in line with the national government’s domestically skewed financing program.

External debt slipped 0.07%, or PHP 4.01 billion, month on month to PHP 6.05 trillion.

The Treasury said the decline was due to the peso’s appreciation, with a favorable downward valuation effect of PHP 18.91 billion offsetting PHP 14.90 billion in net external debt availment.

Despite the monthly decline, external debt was still up 8.22%, or PHP 459.54 billion, from PHP 5.59 trillion at end-December 2025.

The peso appreciated slightly to PHP 61.501 against USD 1 at end-May 2026 from PHP 61.540 at end-April 2026, according to the Treasury.

Guaranteed obligations stood at PHP 443.50 billion as of end-May 2026, up 15.73%, or PHP 60.28 billion, from the previous month.

The increase in guaranteed debt was attributed to PHP 61.62 billion in new domestic guarantees.

This was partly offset by favorable revaluation effects of PHP 0.06 billion for local currency-denominated guarantees and PHP 0.75 billion for third currency-denominated guarantees, as well as PHP 0.53 billion in repayments of external guarantees.

Compared with end-December 2025, guaranteed obligations rose 28.71%, or PHP 98.93 billion.

The latest debt figures come as the government continues to balance financing requirements with fiscal consolidation goals under its medium-term fiscal plan, which targets a gradual narrowing of the deficit and a manageable debt-to-GDP path through the end of the decade.

The government earlier narrowed its 2026–2028 growth targets to 6%–7% amid global uncertainties, including Middle East tensions and changes in U.S. trade policies, Reuters reported in 2025 (Julian Abram Wainwright/Bloomberg via Getty Images Photo)