The national government’s debt payments in the first two months of 2026 surged by 258 percent year-on-year due to large bond maturities and a weaker peso.
Latest data from the Bureau of the Treasury (BTr) showed debt payments ballooned by 258.18 percent to P568.313 billion as of end-February from P158.664 billion in the same period last year.
Broken down, amortization accounted for P391.565 billion while interest payments accounted for P176.748 billion of the total.
Amortization in the two-month period soared by 6,669 percent from merely P5.784 billion a year ago due to a spike in domestic repayments.
This comes after domestic amortization increased by a whopping 88,166 percent to P386.607 billion from P438 million, despite the 7.25-percent decline in foreign amortization to P4.958 billion from P5.346 billion.
According to Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., the surge was mainly driven by the maturity of P232-billion 7-year Treasury bonds (T-bonds) last February 14, which resulted in substantial principal repayments.
‘Furthermore, the higher US dollar/peso exchange rate in recent years led to higher debt servicing in pesos of US dollar and other foreign currency/denominated debts, both principal and interest payments,’ Ricafort added.
Interest payments jumped by 15.61 percent from P152.880 billion in the two-month period last year.
Domestic interest payments rose by 15.15 percent to P131.684 billion as of end-February from P114.353 billion a year ago.
Under domestic interest payments, fixed-rate T-bonds accounted for P105.184 billion, Treasury bills with P8.317 billion, and retail T-bonds with P15.527 billion.
External interest payments totaled P45.064 billion for the two-month period, up by 16.96 percent from last year’s P38.527 billion.
For February alone, total debt service surged by 725.71 percent to P430.644 billion from P52.154 billion in the same month last year.
Amortization expenses for the month ballooned by 10,191 percent year-on-year to P381.713 billion from P3.709 billion.
Interest payments, meanwhile, marginally rose by 1 percent to P48.931 billion from P48.445 billion in February last year.
Ricafort said wider budget deficits, partly due to higher inflation that bloated government spending in recent years, have also led to rising debt servicing costs over the years.
For the coming months, Ricafort said debt payments may increase further as 5-year T-bonds worth P282 billion will mature on April 8.
‘Higher US dollar/peso exchange rate, higher prices/inflation that could bloat the budget deficit, and higher interest rates since the war on Iran/Middle East started on February 28, 2026, could lead to higher debt servicing costs, both principal and interest payments, going forward,’ he added.
For this year, the government programmed debt payments to reach P2.005 trillion, of which P1.005 trillion will be allotted for amortization and P950 billion for interest payments.
As of end-February, the government borrowed P886.998 billion, up by 60.48 percent year-on-year from P552.692 billion a year ago.
The government’s outstanding debt hit a fresh record high of P18.159 trillion as of the end of February 2026, higher by 0.14 percent than the P18.133 trillion recorded a month earlier.