Despite the nearly two percent hike in foreign borrowings, the national government’s outstanding debt fell to ₱17.455 trillion in September, though officials warned that further reductions will depend heavily on the peso’s strength against the United States (US) dollar.

National Treasurer Sharon P. Almanza told Manila Bulletin on Thursday, Oct. 30, that trimming the national debt down to the ₱17.36 trillion end-2025 goal will “depend on the foreign exchange (forex).”

“As you know, the peso has depreciated, and we still have forex liabilities,” Almanza said, referring to the peso’s drop to its weakest-ever level at ₱59.13:$1 last Tuesday, and its downward trend in October.

Almanza earlier told Manila Bulletin that the target remained within the revised medium-term fiscal framework (MTFF), but cautioned that major changes in the value of the country’s debt could be affected by forex valuation.

Meanwhile, Finance Secretary Ralph G. Recto maintained his rosier outlook on debt for the year. “We are on target, as I said before,” he told Manila Bulletin.

According to the latest data from the Bureau of the Treasury (BTr) released on Thursday, Oct. 30, the country’s debt as of end-September eased modestly to ₱17.468 trillion from the previous month’s already reduced pile.

In an Oct. 30 statement, the BTr said this continued decrease reflects the government’s “sound fiscal discipline, strategic borrowing strategy, and proactive liability management, supported by steady market conditions and robust domestic investor confidence.”

However, the end-September level remains ₱95 billion higher than the forecast end-2025 debt level. Compared with last year’s debt stock, the end-September figure was 9.8 percent higher at ₱15.89 trillion.

Debt sourced from domestic lenders fell by ₱114.1 billion, or 0.9 percent, to ₱11.97 trillion from ₱12.09 trillion in August, “as the government paid off more borrowings than it issued new ones.”

“Total repayments exceeded new issuances by ₱117.3 billion, more than offsetting the ₱3.2 billion upward revaluation from the peso depreciation against the retail dollar bonds,” the BTr said.

Almost the entire amount came from government debt securities, with only ₱156 million from loans.

“Domestic borrowings remain the majority, at 68.6 percent of total debt, consistent with the government’s policy of reducing foreign exchange (forex) risk,” the BTr said.

Meanwhile, foreign debt rose by ₱101 billion, or 1.9 percent, to ₱5.38 trillion from ₱5.28 trillion in August. The government attributed this mainly to the weaker peso.

According to the Treasury, this increase more than offset the ₱1.3 billion in net loan repayments and ₱2.1 billion in losses from third-currency fluctuations. The foreign exchange rate used to value the outstanding debt was ₱58.148:$1, compared with ₱57.042:$1 used in August.

Year-to-date, overall borrowings expanded to ₱2.4 trillion, bringing it just ₱200 billion shy of the revised ₱2.6 trillion ceiling. This reflects the government’s continued reliance on local lenders.

Data from the BTr showed that the nine-month total grew by 4.1 percent to ₱2.3 trillion from the same period last year. This already accounts for 92.1 percent of the Marcos administration’s full-year borrowing plan.

Based on the Budget of Expenditures and Sources of Financing (BESF) document for fiscal year (FY) 2026, the government’s debt level is expected to exceed ₱19 trillion by the end of 2026, nearly 10 percent higher than the projected end-2025 level.

Next year’s borrowing mix will be 77:23, meaning 77 percent of debt will be sourced domestically and 23 percent from external sources. This marks a shift from this year’s 81:19 borrowing mix.