Philippine debt load increases under Marcos administration

The national government’s outstanding debt inched up to P17.56 trillion at the end of October 2025, rising by 0.61 percent month-on-month or P106.78 billion, the Bureau of the Treasury (BTr) reported on Tuesday, 2 December. Year-on-year, the debt level climbed by P1.541 trillion from P16.02 trillion from October 2024, marking a 9.62 percent increase.

The Marcos administration has heavily relied on borrowing to fund government priorities, bringing the debt-to-GDP ratio to 60.7 percent in 2024. As of June 2025, debt-to-GDP ratio stood at 63.1 percent, according to the BTr.

While the level is elevated – much higher than the 39.6 percent debt-to-GDP ratio reported at the end of 2019 – economists generally view a 50-70 percent ratio as manageable for emerging economies—provided that borrowing is long-term, well-structured, and supported by strong revenue performance.

Domestic debt—which accounted for 68.6 percent of the total, in line with the government’s strategy of prioritizing local currency financing—rose to P12.05 trillion, up P72.43 billion or 0.60 percent.

Since most of the country’s debt is domestic, interest payments circulate within the local economy rather than flowing overseas, helping reduce external risk. Longer-dated debt also gives the government more predictable repayment schedules, aiding in planning for infrastructure and social programs.

Debt financing, while not uncommon for emerging economies, is not without serious risks. Countries financed on debt are more susceptible to foreign exchange fluctuations and external shocks – both of which the Philippines has experienced throughout the year.

The peso has experienced sharp swings throughout 2025, hitting a record low of P59.17 per US dollar in November amid political and economic uncertainty. It has since begun to recover as of late, supported by seasonal remittances and improving market sentiment.

The BTr reported that peso depreciation against the US dollar added P58.64 billion to the country’s external obligations, partially offset by a P32.54-billion gain from peso appreciation against other currencies—resulting in a net adjustment of P26.1 billion in debt. External debt overall grew by 0.63 percent to P5.52 trillion, driven by P8.25 billion in net loan availments and P26.10 billion in upward foreign exchange adjustments.

Natural disasters have also taken an economic toll on the country. The 6.9-magnitude tremor that struck Cebu in September caused an estimated P2 billion in damage, with an additional P26.7 billion earmarked for Cebu’s flood control projects nowhere to be found when the province was flooded following Typhoon Tino.

Despite these headwinds, the Marcos administration continues to focus on developing the domestic economy. A priority of the country’s 2026 ASEAN chairship is fostering domestic production spearheaded by the Department of Trade and Industry – a measure that aims to make the country more self-reliant in the long run.

The BTr reiterated that it remains committed to careful debt and risk management, ensuring that government borrowing stays consistent with long-term fiscal sustainability goals and supports a stable macroeconomic environment that promotes inclusive, broad-based growth for Filipinos.