The national government’s outstanding debt climbed to P18.55 trillion at the end of May as robust domestic borrowing more than offset the relief from a stronger peso, underscoring Manila’s continued reliance on the local bond market to fund its spending program.
Data from the Bureau of the Treasury showed the debt stock rose P76.11 billion, or 0.4 percent, from P18.47 trillion in April, driven largely by fresh issuances of government securities even as the peso’s appreciation softened the value of foreign-currency obligations.
The latest figures highlight the government’s financing strategy of borrowing more at home to limit exposure to volatile exchange rates while maintaining access to funding amid lingering global uncertainties, including tensions in the Middle East.
Domestic debt rose 0.7 percent to P12.50 trillion after the government raised a net P80.23 billion from local debt securities. The stronger peso slightly reduced the valuation of onshore dollar bonds, trimming about P110 million from the domestic debt stock.
External debt, by contrast, slipped 0.1 percent to P6.05 trillion. Although the government recorded P14.90 billion in net foreign borrowings, the peso’s appreciation against the US dollar and other currencies generated a P18.91-billion downward valuation adjustment, more than offsetting the additional debt.
The debt portfolio remained heavily skewed toward domestic borrowings, which accounted for 67 percent of the total, while foreign obligations made up the remaining 33 percent—a mix that continues to shield public finances from sharp currency swings.
Since the start of the year, however, the debt burden has continued to grow. Domestic obligations have increased 3.1 percent from end-2025, while external debt has expanded 8 percent, reflecting the government’s ongoing financing requirements.
Meanwhile, national government guaranteed obligations surged 16 percent to P443.50 billion after the issuance of P61.62 billion in new domestic guarantees.
The May debt figures suggest that while currency movements can provide short-term relief, they remain secondary to the government’s financing needs. For now, sustained domestic borrowing—not foreign exchange fluctuations—continues to be the primary driver of the country’s expanding debt stock.
