National Government (NG) debt. increased in May as it continues to raise money to support financial needs, i The Bureau of the Treasury (BTr) said.
The latest data from the Treasury showed that the outstanding debt stood at P18.55 trillion at the end of May, up 0.41% from the previous month’s level of P18.47 trillion.
“The increase is mainly due to domestic capital inflows as the government continues to raise funds to support fiscal needs, despite ongoing conflicts in the Middle East,” BTr said in a statement on Thursday.
“At that time, the appreciation of the peso compared to the US dollar and other foreign countries funds have helped to moderate the increase.”
The Department of Finance noted that the local currency strengthened by 3.9 centavos against the dollar to P61.501 as of the end of May from P61.54 as of the end of April.
Year-on-year, outstanding debt increased by 9.62% from P16.92 trillion at the end of May 2025.
NG debt is the sum of money owed by the Philippine government to lenders such as international financial institutions, developing countries, banks, international bondholders and other investors.
A large amount or 67.37% of the total debt comes from domestic sources, while the rest comes from abroad.
“This reflects the government’s prudent debt management strategy to prioritize domestic financing to support domestic capital markets, while reducing exposure to foreign exchange risks,” the Treasury said.
Domestic debt, made up of government bonds, rose 0.65% to P12.5 trillion at the end of May from P12.42 trillion at the end of April.
According to BTr, the month-on-month increase in domestic debt was “mainly due to the P80.23-billion issuance of government securities, while the peso’s appreciation decreased by P0.11 billion in the issuance of offshore bonds.”
Year-on-year, domestic debt increased by 6.07% from P11.78 trillion.
Meanwhile, external debt decreased by 0.07% to P6.051 trillion at the end of May from P6.055 trillion at the end of April.
Year-on-year, it jumped 17.77% from P5.14 trillion.
BTr said the decrease in foreign debt is due to the strong appreciation of the peso against the US dollar and other foreign currencies.
“The positive effect of devaluation of P18.91 billion exceeded the P14.9 billion net external debt,” it added.
The external debt amounted to P3.05 trilthe lion’s share of the world’s bonds and P3 trillion in loans.
Guaranteed NG obligations jumped 15.73% to P443.5 billion as of the end of May from P383.23 billion last month.
“This was partially offset by the positive effects of renewing external guarantees, amounting to P60 million in local currency guarantees and P750 million in third currency guarantees,” it said.
The Department of Finance also disclosed the payment of foreign guarantees worth P530 million.
Annual, guaranteed commitments increased by 29.08% from P343.58 billion.
“The increase in outstanding debt to P18.55 trillion is not surprising given the ongoing needs of the government to fund infrastructure, social programs, and economic development,” said Reyes Tacandong & Co. Senior Counsel Jonathan L. Ravelas told BusinessWorld.
He said the most important metric is whether the economy is growing fast enough to support it debt, rather than the total size of the debt.
“I expect debt levels to continue to rise in the coming months as the government finances its budget needs and pays for growing obligations,” said Mr. Ravelas.
“However, markets will look at the debt to gross domestic product (GDP) ratio rather than the total debt level,” he added.
NG’s outstanding debt is expected to reach P19.06 trillion by the end of 2026 under the 2026 Expenditure and Financing Sources Budget.
The debt-to-GDP ratio stood at 65.2% in the first quarter, up from 60.7% last year The highest rate since 65.7% recorded in 2005.
This also exceeded the government’s 2026 target range of 60% to 63% under the Philippine Development Plan 2023-2028 Mid-Term Review Results Matrices released in May. – Justine Irish D. Tabile
