FOREIGN holdings of Philippine government securities jumped in 2025, as investors were drawn to relatively higher yields and improving macroeconomic conditions.
Total foreign holdings rose by 32.13 percent to P600.03 billion by the end of 2025 from P454.12 billion in end-2024, according to data from the Bureau of the Treasury (BTr).
The share of foreign holders of government securities to total holdings also grew to 5 percent from 4.2 percent in 2024, a steady upward trend from 2.10 percent in 2023.
‘Philippine government bonds offered investors relatively high returns while maintaining investment-grade credit quality, making them an attractive destination amid improving global risk sentiment and renewed interest in emerging-market debt,’ said Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, to BusinessMirror.
Investors were attracted by higher yields, the possibility that the Bangko Sentral ng Pilipinas would reduce interest rates, lower inflation and sustained confidence in the country’s macroeconomic fundamentals, Asuncion said.
Demand for short-term securities remained strong as this was further supported by uncertainties in the global market in the first half of the year and investors sought lower-risk instruments.
Aggregate trading volume of government securities also hit P12.7 trillion as of end-2025, an 80 percent increase from P7.052 trillion in the previous year, enhancing price discovery and liquidity.
‘BTr aims to steadily increase the share of foreign holders in government securities as part of its ongoing efforts to enhance foreign investor participation,’ the Treasury said.
Last year, the national government raised P191.965 billion through its issuance of global bonds. The Republic launched a landmark multicurrency deal including a $1.25-billion 10-year tranche, a $1-billion 25-year ESG tranche and its first-ever pound 1- billion sustainability-themed security in the Euro market.
About 68.42 percent of the government’s outstanding debt is sourced from the domestic market, while 31.6 percent has been sourced externally as of end-2025.
Majority of the government’s debt is in Philippines pesos (67.78 percent), followed by US dollars (25.81 percent), Euro (3.21 percent), Japanese Yen (2.99 percent), Chinese Yuan (0.05 percent) and other currencies (0.15 percent).
The weighted average interest rate for the entire foreign debt is 4.33 percent, while domestic debt is 5.73 percent as of end-2025, Treasury data showed.
The government follows the Medium-Term Debt Strategy (MTDS), which prioritizes domestic funding to mitigate foreign exchange risks while targeting concessional loans and US dollar-denominated debt. It also aims for a mix of at least 75 percent domestic and 25 percent external financing.
All MTDS risk indicators remain within targets, with the average time to maturity for the total debt portfolio at 7.41 years against the seven- to 10-year target as of end-2025.
Approximately 90.38 percent of the total debt is fixed-rate, while the average time to re-fixing of outstanding debt is 6.10 years due to limited issuance volume of tenors at the long end of the curve as of end-2025, Treasury data showed.