BTr: Gov’t debt hit fresh peak of P16.31T in January

INQUIRER FILE PHOTO

Manila, Philippines – The government opened 2025 with an outstanding debt that rose to a new record-high of P16.31 trillion, as the state borrowed more to plug its budget hole while the peso was weak, which inflated the value of foreign currency-denominated obligations.

The latest data from the Bureau of the Treasury (BTr) showed the state’s total liabilities swelled by 1.63 percent or P261.47 billion month-on-month in January.

But compared with a year ago, debts went up by a higher 10.29 percent.

READ: PH debt load rose 9.8% to P16.05T in 2024

The government borrows from creditors at home and abroad to bridge its budget deficit, which was capped at P1.54 trillion or 5.3 percent of gross domestic product this year.

Broken down, domestic debts rose by 1.41 percent to P11.08 trillion in the first month of the year, after the state borrowed P152.17 billion more than it paid to local lenders.

Weak peso effect

At the same time, a depreciating peso, which flirted with the 57 and 58 levels in January based on Treasury data, had bloated the dollar-denominated local debts of the government by P1.51 billion.

Foreign liabilities, meanwhile, went up by 2.10 percent to P5.23 trillion due to the net availment of loans amounting to P59.30 billion.

The BTr also said the weak local currency had increased the peso-value of offshore debts by P48.49 billion.

For this year, the Marcos administration is targeting borrowing P2.55 trillion from creditors at home and abroad to plug its fiscal deficit.

By sources of financing, the government will borrow P507.41 billion from foreign investors. The remaining P2.04 trillion is targeted to be raised domestically.

All of this, in turn, is expected to push the government’s outstanding debt to P17.35 trillion by the end of 2025.

Foreign borrowings

Finance Secretary Ralph Recto said earlier that the government wants to eventually lessen the share of foreign borrowings to 10 percent—from the current level of around 25 percent—to minimize foreign exchange risks.

With interest rates still relatively high and the peso remaining weak, the Marcos administration plans to go more local with its borrowing strategy, noting that there was still excess liquidity in the domestic economy looking for viable investment outlets. INQ