Ralph Recto —NIÑO JESUS ORBETA
MANILA, Philippines — The depreciation of the Philippine peso boosted the government’s debt load in July to a fresh record high of P17.56 trillion, surpassing the Marcos administration’s borrowing target for the entire year, according to the latest data of the Bureau of the Treasury (BTr).
The debt load rose by 1.7 percent, or P296.19 billion, from the previous month. Figures showed that the peso, which mostly traded between P56 and P57 to the dollar in July, contributed to the increase.
This pushed up the national government’s liabilities beyond the initial target of P17.36-trillion for the entire year, but the BTr said it expected the debt burden to ease toward the end of 2025 as the government pays off P814.2 billion in maturing domestic bonds later this year.
According to the Department of Finance (DOF), Secretary Ralph Recto ordered more borrowing from domestic sources, under a 80:20 borrowing mix strategy, to support the development of local capital markets and mitigate foreign exchange risks.
The DOF said in a statement last month that 91.5 percent of the government borrowing consists of fixed-interest loans, shielding the country from exchange rate fluctuations, while 81.3 percent of borrowings have long-term repayment periods.
The BTr also said fundraising activities are winding down after borrowing P1.76 trillion in the first seven months, or about two-thirds of the Marcos administration’s P2.6-trillion financing plan for 2025. The borrowing program is meant to plug a projected budget deficit of P1.56 trillion, which is equivalent to 5.5 percent of gross domestic product (GDP).
“The Marcos Jr. administration remains steadfast in its commitment to prudent debt management by leveraging strong investor confidence in peso-denominated securities while ensuring that borrowings are at the lowest possible cost,” the BTr said.
Local borrowings, some of which were US dollar-denominated, edged up by 1.3 percent month-on-month to P12.11 trillion. This accounted for nearly 69 percent of the total debt load as of July.
Obligations to foreign creditors, meanwhile, rose by 2.6 percent to P5.46 trillion.
READ: PH gov’t debt seen topping P19T in 2026
Tax collections up
On the revenue side, the DOF reported in June that tax collections continued to post double-digit increases without new taxes.
The Bureau of Internal Revenue (BIR) reported a collection of P1.11 trillion as of end-April, 14.50 percent higher compared to the same period last year, while the Bureau of Customs (BOC) collected P306.1 billion over the same period, exceeding last year’s performance by 2.16 percent.
The country’s fiscal deficit has also been steadily narrowing, dropping to 5.7 percent of GDP in 2024—a significant improvement from the pandemic peak of 8.6 percent in 2021, 7.3 percent in 2022, and 6.2 percent in 2023. This is on track to decline to about 3.8 percent by 2028.
Fiscal planners said they will continue to favor onshore borrowing to limit exposure to foreign exchange risks as the government pushes its bid to gain another credit rating upgrade.
Credit rating upgrade
The government’s strict adherence to fiscal discipline has earned it a recent credit rating upgrade of A- from Japan’s Rating and Investment Information Inc. last month.
S&P Global Ratings also upgraded the country’s credit outlook from “stable” to “positive” in November last year.
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“The national government’s borrowings are used to support key infrastructure and development initiatives in education, health care, agriculture and social services, among other priorities of the Marcos Jr. administration,” the Treasury added.
