By Justine Irish D. Tabile, Senior Reporter

The Philippine National Government's (NG) total outstanding debt climbed to a record P19.07 trillion as of end-June, driven by increased domestic and external borrowings, according to the Bureau of the Treasury (BTr).

Treasury data showed the debt stock rose 2.8% from P18.55 trillion at the end of May. "The P518.98-billion increase from the end-May 2026 level of P18.55 trillion was driven by the net availment of both domestic and external borrowings to fund national development," the BTr said.

The Treasury noted that the "favorable movement" of the peso helped moderate the month-on-month debt increase. The local currency strengthened by 21.1 centavos to P61.29 against the US dollar as of end-June, compared with its P61.501 finish at end-May.

On a year-on-year basis, outstanding debt grew 10.41% from P17.27 trillion at end-June 2025. It also rose 7.67% from P17.71 trillion at end-2025.

The end-June debt stock already slightly exceeded the P19.06-trillion level projected for end-2026 under the 2026 Budget of Expenditures and Sources of Financing.

NG debt represents the total amount owed by the Philippine government to creditors, including international financial institutions, development partner countries, banks, global bondholders, and other investors.

"The NG continues to implement a borrowing mix in favor of domestic sources to reduce exposure to foreign exchange risks and support a more stable debt profile," the Treasury said.

Domestic sources accounted for 67.33% of the total debt stock, while external borrowings made up the remaining 32.67%.

Domestic debt, comprising almost entirely government securities, inched up 2.74% to P12.84 trillion at end-June from P12.5 trillion at end-May. Year on year, it increased 7.43% from P11.95 trillion in the same period in 2025.

The BTr attributed the month-on-month rise in domestic debt primarily to P342.93 billion in net issuance of government securities. This was partly offset by a P600-million downward valuation adjustment on onshore dollar bonds resulting from the stronger peso.

External debt climbed 2.92% to P6.23 trillion at end-June from P6.05 trillion at end-May. Year on year, it surged 17.13% from P5.32 trillion in the same period.

"This (the increase) is mainly due to the net availment of external loans amounting to P223.11 billion," the BTr said. "Meanwhile, the appreciation of the peso against the US dollar and third currencies reduced the peso value of foreign currency-denominated obligations by P46.46 billion."

External debt consisted of P3.19 trillion in global bonds and P3.04 trillion in loans.

The NG's guaranteed obligations fell 31.21% to P305.07 billion at end-June from P443.51 billion in the prior month. "Net repayment of external and domestic guarantees totaled P470 million and P136.71 billion, respectively, while favorable foreign exchange movements further trimmed outstanding guarantees by P1.26 billion," the BTr said. Year on year, guaranteed obligations declined 11.6% from P345.11 billion.

Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera said the increase reflected continued government borrowing to finance its fiscal deficit, ongoing infrastructure investments, and debt management operations.

"The current debt level remains manageable as long as the economy continues to grow and the government maintains fiscal consolidation," Mr. Rivera said in a Viber message. "What matters is not just the size of the debt, but whether it is used to finance productive investments that support long-term growth and generate future revenues."

Mr. Rivera said the debt stock is likely to rise further in the coming months, "broadly consistent with the NG's medium-term fiscal consolidation strategy." The government's Medium-Term Fiscal Framework targets narrowing the budget deficit as a share of GDP while channeling spending toward the Marcos administration's Build-Better-More infrastructure program, which prioritizes major transport, energy, water, and digital projects.

Under the Philippine Development Plan 2023-2028 Midterm Update Results Matrices posted on May 20, the government expects the debt-to-gross domestic product (GDP) ratio to fall within the 60-63% range in 2026. In the first quarter, the debt-to-GDP ratio climbed to 65.2%, its highest level since 65.7% recorded in 2005. The 60% threshold is widely used by multilateral institutions such as the International Monetary Fund as a benchmark for emerging-market debt sustainability and is among the metrics tracked by major credit rating agencies. The Philippines currently holds investment-grade sovereign ratings — Baa2 from Moody's, BBB from S&P Global Ratings, and BBB from Fitch Ratings — whose assessments factor in the country's fiscal trajectory and debt management track record.