THE NATIONAL Government’s (NG) outstanding debt hit a fresh high of P16.31 trillion at the end of January as it ramped up borrowings, the Bureau of the Treasury (BTr) said on Tuesday.

Preliminary data from the BTr showed that outstanding debt jumped by 1.63% or P261.47 billion to P16.31 trillion from P16.05 trillion at end-2024.

“The month-over-month rise in debt stock was due to the net incurrence of new domestic and external debt, as well as the impact of peso depreciation against the US dollar from P57.847 at the end of 2024 to P58.375 at the end of January 2025,” the Treasury said in a statement.

The debt stock rose by 10.29% from P14.79 trillion at end-January 2024.

“This level remains manageable and in line with the government’s target to support economic development while ensuring fiscal sustainability,” the BTr said.

NG debt is the total amount owed by the Philippine government to creditors such as international financial institutions, development partner-countries, banks, global bond holders and other investors.

BTr data showed the bulk or 67.9% of total outstanding debt was from domestic sources, while 32.1% was from foreign creditors.

Domestic debt increased by 1.41% or P153.68 billion to P11.08 trillion as of January from P10.93 trillion in December. Year on year, it rose by 9.07% from P10.16 trillion recorded at end-January 2024.

“This was mainly due to the net issuance of government securities of P152.17 billion as gross issuances of P270.01 billion exceeded repayments of P117.84 billion to partly finance the projected deficit for the quarter,” the BTr said.

The valuation effect of the peso depreciation against the US dollar increased domestic debt by P1.51 billion in January.

Meanwhile, external debt went up by 2.1% to P5.23 trillion as of end-January from P5.12 trillion at end-2024.

Year on year, external debt climbed by 12.98% from P4.63 trillion.

“This was driven by net availment of foreign loans amounting to P59.3 billion, as well as the upward revaluation caused by unfavorable US and third currency movements amounting to P46.74 billion and P1.75 billion, respectively,” the Treasury said.

External debt consisted of P2.7 trillion in global bonds and P2.52 trillion in loans, the BTr said.

NG-guaranteed obligations slipped by 0.11% to P346.27 billion as of end-January from the end-December level of P346.66 billion.

Year on year, guaranteed obligations fell by 0.69% from P348.66 billion.

As of end-January, the net repayment of domestic guarantees stood at P1.55 billion, while external guarantees amounted to P250 million.

“The redemption of matured guarantees more than offset the currency valuation adjustments on US dollar and third-currency denominated guarantees amounting to P0.83 billion and P0.58 billion, respectively,” the BTr said.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the increase in outstanding debt reflected the continued budget deficit in recent months that “fundamentally required additional borrowings” by the government.

The NG posted a budget deficit of P1.506 trillion in 2024, narrowing by 0.38% year on year. However, it overshot the P1.48-trillion deficit ceiling set by the Development Budget Coordination Committee (DBCC) by 1.48%.

Mr. Ricafort also said the weaker peso against the US dollar in January increased the peso value of external debt.

He expects the NG debt to set new records as the government ramped up borrowings in the early part of 2025.

“(There is also) the need to hedge both local and foreign borrowings of the National Government given the Trump factor that caused volatility in the global financial markets,” he said.

Oikonomia Advisory and Research, Inc. economist Reinielle Matt M. Erece said debt is expected to further increase.

“I would expect debt to rise this year as a result of both expansionary fiscal policy to promote growth and an election year, which usually results in higher government spending. Financing this spending is difficult to achieve with a tight fiscal space and borrowing might be needed,” he said.

Mr. Erece said the debt is still manageable “as long as the government improves its revenue generation and minimizes corruption.”

At end-December, the country’s debt as a share of gross domestic product (GDP) inched up to 60.7% from 60.1% a year earlier. This is slightly higher than the 60% threshold considered manageable by multilateral lenders for developing economies.

The Philippines’ debt-to-GDP ratio of 60.7% positions it “competitively” with its Southeast Asian peers, according to the BTr. It is higher than Thailand’s 56.6% and Indonesia’s 36.8%, but below Malaysia’s 64.6% and Singapore’s 173.1%.

The government aims to bring down the debt-to-GDP ratio to 60.4% this year, 60.2% in 2026 and 56.3% in 2028.

The National Government plans to borrow P2.55 trillion this year — P2.04 trillion from the domestic market and P507.41 billion from external sources. — Aubrey Rose A. Inosante