THE national government’s outstanding debt swelled to another record high of P19.66 trillion as of the end of September, with debt affordability and foreign-exchange movement exposures weighing on its fiscal strength.
Debt held by the government rose by 12.63 percent from P17.455 trillion in the same period a year ago, data released by the Bureau of the Treasury on Friday showed.
Of the amount, domestic debt accounted for 67.39 percent, while external debt comprised 32.61 percent.
The outstanding debt is also higher by 0.27 percent than the P19.606 trillion recorded as of end-August 2026.
Liabilities sourced at home inched up by 0.07 percent month-on-month to P13.248 trillion from P13.239 trillion.
Domestic debt increased due to the P7.66-billion net issuance of government securities, while the weakening of the peso against the US dollar put an additional P1.12 billion to the value of onshore dollar bonds, the Treasury explained.
Year-to-date, local debt surged by 9.34 percent from P12.116 trillion due to cumulative borrowing and valuation adjustments arising from movements in foreign exchange rates, the Treasury said.
Meanwhile, year-on-year, this jumped by 10.65 percent from P11.972 trillion.
On the other hand, foreign obligations grew 0.70 percent month-on-month to P6.411 trillion from P6.367 trillion.
The peso depreciation against the greenback has pushed up the peso value of foreign-currency-denominated debt by P40.12 billion, as well as the P9.27 billion net availment of external loans, the Treasury said.
Still, ‘favorable’ movements in third currencies against the US dollar partly offset the increase, resulting in a P4.70-billion decrease in valuation.
To date, offshore debt posted a 14.67-percent increase from P5.591 trillion as of end-December 2025.
The Treasury pointed to the P462.85 billion in net external borrowing and valuation effects from exchange rate movements amounting to P357.58 billion.
External obligations also climbed by 16.96 percent from P5.482 trillion in the same period last year.
‘We expect fiscal consolidation to remain broadly on track despite weaker growth and uncertainty surrounding proposed revenue measures,’ Moody’s Ratings said in its latest credit analysis for the Philippines.
Moody’s assessed the country’s fiscal strength as ‘ba2,’ citing weakening debt affordability, elevated debt burden and exposure to exchange-rate movements through foreign-currency debt.
‘Debt affordability will remain the principal constraint on fiscal strength, with interest payments projected to remain above 14 percent of revenue, compared with a Baa-rated peer median of around 9 percent,’ the credit rater said.
With more than 30 percent of government debt in foreign currency, Moody’s said this leaves fiscal metrics exposed to exchange-rate movements.
This, despite prudent liability management, a predominantly domestic funding base, long average maturities and a fixed-rate share of about 90 percent to mitigate refinancing and interest-rate risks, Moody’s added.
General government debt as a share of gross domestic product is expected to ‘stabilize’ at around 58 percent over the next two years, according to Moody’s, on a par with similarly rated peers.
This will gradually decline as growth recovers and primary balances improve, it added.