The Philippines has kicked off 2025 by marking a new milestone with its sovereign debt escalating to a record P16.31 trillion by the end of January, as reported by the Bureau of the Treasury (BTr). This figure signifies a 1.63% increase from December 2024’s P16.05 trillion. Despite this rise, the Treasury maintains that the debt level is aligned with the government’s strategy to balance economic growth and fiscal responsibility.
The debt-to-GDP ratio at the close of 2024 was 60.7%, slightly above the internationally accepted limit of 60%, suggesting the country is treading close to the threshold. This ratio, crucial for gauging fiscal health, lessens potential negative economic impacts when kept low.
Factors contributing to the monthly debt increase include fresh domestic and international debt, alongside the peso’s depreciation against the US dollar, shifting from P57.847:$1 in December 2024 to P58.375:$1 by January end. The local debt comprises 67.9% of the total debt at P11.08 trillion, driven by significant government securities net issuance, whereas foreign debt increased by 2.1% to P5.228 trillion due to new loans and currency revaluations.
Looking ahead, Finance Secretary Ralph Recto projects the national debt could surge to P20 trillion by the conclusion of President Ferdinand Marcos Jr.’s term in 2028. However, he assures that economic growth is expected to surpass debt increments, with the economy potentially valued at P37 trillion against a projected P20 trillion debt by 2028.