The national government's debt has risen in May, driven by the need to fund various financing requirements. The outstanding debt stood at P18.55 trillion as of end-May, a 0.41% increase from the previous month's level of P18.47 trillion.
The Bureau of the Treasury attributed the increase to the net incurrence of domestic securities, despite the ongoing Middle Eastern conflict. The appreciation of the peso against the US dollar and other foreign currencies also helped temper the increase, with the local currency strengthening by 3.9 centavos against the dollar to P61.501 as of end-May.
Year on year, the outstanding debt went up by 9.62% from P16.92 trillion at end-May 2025. The bulk of the total debt stock, 67.37%, came from domestic sources, while the rest were from external sources.
The government's debt management strategy prioritizes domestic financing to support local capital markets and reduce exposure to foreign exchange risks. Domestic debt, which is composed of government securities, inched up by 0.65% to P12.5 trillion at end-May from P12.42 trillion at end-April.
External debt, on the other hand, dipped by 0.07% to P6.051 trillion as of end-May from P6.055 trillion at end-April. The drop in external debt is due to the significant peso appreciation against the US dollar and other foreign currencies.
The national government's guaranteed obligations jumped by 15.73% to P443.5 billion as of end-May from P383.23 billion in the previous month. However, this increase was partially offset by favorable revaluation effects on external guarantees.
Economists expect the government's debt levels to continue rising in the coming months as it funds its budget requirements and refinances maturing obligations. The debt-to-gross domestic product (GDP) ratio is expected to be closely watched by markets, rather than the absolute debt level.
The national government's outstanding debt is projected to reach P19.06 trillion by end-2026, exceeding the government's 2026 target range of 60% to 63% under the Philippine Development Plan 2023-2028 Midterm Update Results Matrices.
