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Manila Bulletin devider Business devider Banking & Finance devider Gov't debt payments surge 29% as interest costs mount

Gov't debt payments surge 29% as interest costs mount

Published Mar 30, 2026 04:30 pm  |  Updated Mar 30, 2026 02:34 pm
Higher interest and principal payments drove the national government’s (NG) total debt payments in the first month of 2026, which surged by 29.3 percent to ₱137.7 billion from ₱106.5 billion in January last year
Data from the Bureau of the Treasury (BTr) indicate that this double-digit increase was driven by significant growth in both interest payments and amortization.
Interest payments continued to account for the bulk of the government’s debt obligations, making up 92.8 percent of the total. These payments climbed by 22.4 percent to ₱127.8 billion from ₱104.4 billion a year earlier.
Domestic lenders received ₱94.6 billion in interest payments in January 2026, marking a 30.9 percent increase from ₱72.3 billion in January 2025.
Broken down, interest on fixed-rate Treasury bonds (T-bonds) rose by 34.1 percent to ₱85.4 billion from ₱63.7 billion. Interest on short-dated Treasury bills (T-bills) climbed by 13.9 percent to ₱3.7 billion from ₱3.2 billion, while payments for retail Treasury bonds (RTBs) remained steady at ₱3.6 billion.
Additionally, interest payments on the government’s other domestic obligations increased to ₱2 billion from ₱1.8 billion the previous year.
Interest payments on the government’s external debt also inched up by 3.3 percent to ₱33.21 billion from ₱32.15 billion in January last year.
Amortization, which accounted for the remaining 7.2 percent of total debt service in January, spiked nearly fivefold to ₱9.9 billion from ₱2.1 billion in the same month of the previous year.
This sharp rise was mainly due to domestic amortization, which surged to ₱8.1 billion from just ₱317 million in January 2025. Conversely, the government slightly reduced its amortization to foreign lenders from ₱1.758 billion to ₱1.756 billion.
Recall that the NG’s debt service burden surged to a record ₱2.1 trillion in 2025, as the administration of President Ferdinand Marcos Jr. grappled with ballooning interest costs that now consume an increasing share of the budget. Total debt payments last year rose 4.1 percent from ₱2.02 trillion in the previous year.
Last year, the NG’s total outstanding debt climbed to a new record of ₱17.71 trillion, driven by additional borrowings to fund projects and the peso’s continued weakening against the US dollar and other currencies.
The government failed to keep borrowings within its end-2025 target of ₱17.36 trillion, overshooting the ceiling by more than ₱350 billion.

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Bureau of the Treasury (BTr) Debt
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