THE national government’s outstanding debt surged by nearly a third of a trillion pesos in just a month.
Data released by the Bureau of the Treasury on Thursday revealed that the outstanding debt climbed to a new record of P19.39 trillion as of end-July 2026.
This amount grew by 1.70 percent, or P323.53 billion, from P19.07 trillion at end-June 2026.
The Treasury said the increase was ‘primarily driven by the net availment of domestic and external debt, as well as the revaluation of foreign currency-denominated obligations following movements in the peso relative to the US dollar and other foreign currencies.’
The peso weakened against the dollar from P61.290 as of end-June 2026 to P61.327 as of end-July.
The outstanding debt rose by 10.39 percent, or P1.826 trillion, year-on-year from P17.563 trillion.
Domestic debt accounted for the bulk, or 67.61 percent, of the total debt stock while external obligations comprised the remaining 32.39 percent.
Debt owed to local creditors went up by 2.11 percent month-on-month to P13.11 trillion as of end-July from P12.84 trillion.
The increase was driven by the Treasury’s net issuance of government securities worth P271.22 billion, with the remaining movement due to the slight upward revaluation of Onshore Dollar Bonds (ODBs).
Year-on-year, domestic debt climbed by 8.26 percent from P12.108 trillion.
Foreign debt, meanwhile, increased by 0.84 percent to P6.28 trillion as of end-July from P6.23 trillion a month ago. This also went up by 15.12 percent from P5.455 trillion in the same period a year earlier.
The Treasury said the increase was mainly due to P17.10 billion in net external loan availment, complemented by the higher peso value of foreign currency-denominated obligations following the depreciation of the peso against the US dollar and third currencies.
The national government’s outstanding debt relative to the size of the gross domestic product (GDP) climbed to a 22-year-high in the second quarter, after the economy grew by only 2.3 percent in the second quarter while the debt stock was at an all-time high of P19.065 trillion.
The debt-to-GDP ratio rose to 66 percent in the second quarter, the highest since 2004 at 71.6 percent, according to data released by the Bureau of the Treasury last month.
Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC), said the outstanding debt swelled due to increased foreign borrowing as well as the weaker dollar-peso exchange rate in recent months.
‘The record high outstanding national government debt also reflected wider budget deficits in recent months/years and increased borrowings in recent years especially since the Covid-19 pandemic, in pesos as well as in US dollars/foreign currencies,’ added Ricafort.
For the month of July 2026, Ricafort said the US dollar-peso exchange rate already weakened by 5 percent year-on-year, ‘thereby bloating foreign debts when converted to pesos and partly contributed to the record high outstanding national government debt in recent months.’
For the coming months, Ricafort said the catch-up spending, especially on infrastructure, is expected to make up for the government underspending since the latter part of 2025 due to the anomalous flood control projects.
However, he said this could partly lead to wider budget deficits and could again require additional government borrowings which he said ‘could still lead to new record high outstanding national government debt.’
The national government’s outstanding debt is projected to swell to P21.479 trillion by the end of 2027, as a persistently weak peso, growing financing requirements and repayment of maturing loans add to the debt burden.
The expected debt is seen to increase by 8.67 percent from the P19.765 trillion projected by the end of this year, based on the Budget of Expenditures and Sources of Financing released after the turnover of the 2027 proposed budget to the House of Representatives on Tuesday.