Despite an increase in the Philippines’ general government (GG) debt-to-gross domestic product (GDP) ratio to 57.1 percent in 2024, the Marcos Jr. administration is targeting to gradually lower this debt ratio to the 54-percent level by the end of 2028.

This was indicated in the national government’s (NG) midterm update on its Philippine Development Plan (PDP) 2023-2028—the current administration’s medium-term socioeconomic blueprint—published last Friday, Aug. 15, which retained its debt management strategies.

But the historically used NG debt-to-GDP ratio has been replaced by the GG debt ratio as a core indicator of the updated PDP 2023-2028 target “as it presents a more holistic view of the government’s liabilities.”

The GG debt ratio is also the metric that credit rating agencies monitor for their ratings actions, as it excludes intragovernmental debt holdings.

Data from the Department of Finance (DOF) showed that the country’s GG debt-to-GDP ratio has been rising post-pandemic. From 37.7 percent in 2013, this debt ratio fluctuated at lower 34-percent levels until 2019, before spiking to 48.1 percent at the height of the Covid-19 pandemic in 2020.

It breached the 50-percent level in 2021 at 53.4 percent, climbed further to 54.2 percent in 2022, but eased to 53.6 percent in 2023. From a jump to 57.1 percent last year, the government now aims to reduce the share of GG debt to the country’s economic output to 54.4 percent this year.

For next year, the target ratio stands at 55.6 percent, slightly higher than the 2025 target. The government aims to reduce this further to 55.4 percent in 2027 and 54.7 percent by the end of the Marcos Jr. administration.

To recall, the NG’s outstanding debt breached the ₱17-trillion mark in June, reaching a fresh record high of ₱17.27 trillion. It is projected to close this year at ₱17.36 trillion.

According to the 2026 Budget of Expenditures and Sources of Financing (BESF) document, the NG’s debt level is expected to exceed ₱19 trillion by the end of 2026, hitting a new high of ₱19.06 trillion, which is 9.8-percent higher than the projected end-2025 level.

Among the focuses of the updated PDP 2023-2028 are sound fiscal management and improving tax system efficiency. In particular, it targets a productive, equitable, and simple tax system; an efficient and inclusive budget process; stronger local government finance; and sustainable debt management.

“Debt management strategies will continue to ensure that the government’s financing needs, and payment obligations are met at the lowest cost and within acceptable risk levels,” the document read.

Notably, its financing-mix target for the second half of the Marcos Jr. administration is 80 percent from domestic sources and 20 percent from foreign sources. But the 2026 BESF projects the government will increase its external borrowings next year, which would lead to a 77:23 financing mix. This mix is projected to be sustained through 2028, falling short of the target.

To help fund its programs, the updated PDP 2023-2028 showed that the government will tap corporate, institutional, and individual savings by further developing the domestic capital market.