The central government’s outstanding debt rose to a new record of P18.16 trillion as of end-February 2026, driven largely by continued domestic borrowing even as external obligations declined, according to the Bureau of the Treasury (BTr).

In a recent statement, the BTr said the latest figure was up P25.74 billion, or 0.14 percent, from January, a modest increase that reflects a “stable” and “well-managed” debt position amid shifting global financial conditions.

Since President Ferdinand R. Marcos Jr. assumed office in 2022, the national debt has increased by about P4.74 trillion. His administration inherited a debt stock of roughly P13.42 trillion from the Duterte administration, which relied heavily on borrowing during the economic downturn caused by the Covid-19 pandemic.

“This was largely driven by the continued prioritization of domestic financing to protect the government’s debt position from unfavorable external developments. In particular, with domestic debt accounting for 68.7 percent of the total, the NG maintains a prudent debt profile that minimizes vulnerability to foreign exchange fluctuations,” the Treasury said.

Local IOUs grow

Domestic debt continued to account for the bulk of the total, comprising 68.7 percent of the debt stock, as the government prioritized local financing to reduce exposure to foreign exchange risks. Borrowing from domestic sources rose by P154.39 billion, or 1.25 percent, to P12.48 trillion, driven by the issuance of P158.14 billion in government securities to fund infrastructure and other priority expenditures.

In contrast, external debt declined to P5.68 trillion, down P128.65 billion or 2.21 percent, as favorable exchange rate movements reduced the peso value of foreign currency-denominated obligations by more than P136 billion.

These valuation gains more than offset P7.78 billion in net external borrowings during the month. Despite the decline in external debt, the government continued to tap offshore markets, with total external financing reaching P203.1 billion, including the issuance of $2.75 billion in multi-tranche global bonds with maturities ranging from 5.5 to 25 years, highlighting sustained investor demand for Philippine debt.