The national government’s outstanding debt climbed to a fresh record of ₱18.55 trillion in the first five months of the year, driven by the aggressive domestic borrowing campaign that outpaced repayments and tested the country’s fiscal limits amid global market volatility.

According to the latest data from the Bureau of the Treasury (BTr) released on Thursday, July 2, the end-May level increased by 0.4 percent, or ₱76.1 billion, from the ₱18.47 trillion recorded at the end of April.

Per the BTr, the outstanding debt bloated further because the government issued more local bonds than it repaid during the month to fund various state programs. The Treasury added that the borrowing spree continued as planned despite capital market swings triggered by the ongoing Middle Eastern conflict.

“Meanwhile, the appreciation of the peso against the US dollar and other foreign currencies helped temper the increase,” the Treasury said.

Domestic debt, which now accounts for 67.4 percent of the country’s total obligations, rose to ₱12.50 trillion—a 0.7 percent increase from April's ₱12.42 trillion. This spike was driven mainly by the ₱80.2 billion net issuance of government securities, though a stronger peso helped by trimming the valuation of onshore dollar bonds.

Conversely, external debt dipped slightly to ₱6.05 trillion as of end-May, down from the previous month’s ₱6.06 trillion.

The BTr attributed this modest contraction to the “significant peso appreciation against the US dollar and other foreign currencies.” Data showed that the stronger peso slashed the value of foreign debt by ₱18.91 billion, outpacing the ₱14.90 billion in net external debt availments during the period.

During May, the exchange rate moved from ₱61.540 to ₱61.501 against the greenback. Despite the monthly dip, the current external debt level still represents an 8.2 percent surge from the end-2025 level of ₱5.59 trillion.

Government-guaranteed obligations saw a substantial jump, reaching ₱443.5 billion as of end-May. This represents a 15.7 percent spike from April's ₱383.2 billion, driven primarily by the issuance of ₱61.6 billion in new domestic guarantees. This surge was only marginally offset by favorable revaluation effects and repayments on external guarantees.

As the government manages its debt portfolio, it continues to prioritize domestic financing to support local capital markets and minimize exposure to foreign exchange risks.

Given that the outstanding debt level stood at ₱17.71 trillion at the end of 2025, total national government debt has already grown by 4.7 percent year-to-date.

Based on the Budget of Expenditures and Sources of Financing (BESF) document for fiscal year 2026, the national government's total debt is projected to breach the ₱19 trillion mark this year—a 7.6 percent escalation from the 2025 level. (Derco Rosal)