PH debt levels remain sustainable — DOF

MANILA, Philippines — The Philippines’ debt remains at a sustainable level as the government works to narrow its fiscal deficit, Department of Finance (DOF) Secretary Frederick Go said Monday.

Go made the statement as he presented the DOF’s assessment of the country’s debt situation during the House committee on appropriations’ briefing on financing sources, expenditure levels, and budget proposals of government departments, agencies, and government-owned and controlled corporations.

READ: Government debt hits new high of P17.65 trillion

According to Go, the national government’s debt in 2025 stood at 63.2 percent of the country’s gross domestic product (GDP), and the country’s general government debt last year stood at 56.8 percent of GDP.

The DOF chief noted that this figure is below the World Bank’s 70 percent benchmark for debt sustainability and falls within a “manageable range” compared with other emerging economies, such as Myanmar (51.9 percent), Indonesia (41 percent), and Cambodia (26.5 percent).

“More importantly, on our debt, we have maintained a prudent debt mix: predominantly domestic debt, predominantly carrying fixed interest rates, and predominantly structured with long repayment terms,” he added.

Go said 67.3 percent of the country’s outstanding debt is “domestic,” which he said reduces exposure to foreign exchange risks while supporting the continued development of the local capital market.

He also noted that 90 percent of the country’s debt carries fixed interest rates, providing greater certainty in debt servicing costs and shielding the government from sudden increases or fluctuations in global interest rates.

Meanwhile, 84.1 percent of the Philippine government’s debt has “long-term repayment” periods, meaning the government has several years before these obligations fall due.

“This longer maturity profile reduces our refinancing risks and gives us greater predictability in managing our debt obligations,” Go said.

“This strategic borrowing mix by our Bureau of Treasury strengthens our resilience to external shocks and makes our debt obligations more predictable and manageable over the long term,” he added.

‘PH fiscal deficit has continued to narrow’

According to the DOF secretary, the government’s efforts to narrow the country’s fiscal deficit have helped keep debt levels sustainable.

Go mentioned that the country’s fiscal deficit was recorded at 5.6 percent last year, lower than the 8.6 percent recorded in 2021, 7.3 percent in 2022, and 5.7 percent in 2024.

“And we continue to make progress this 2026, despite the economic shocks that we have faced, including those arising from the conflict in the Middle East,” he said.

Go emphasized that the country’s deficit-to-GDP ratio in the first half of 2026 fell to 5.46 percent, compared with 5.65 percent in the same period of 2025.

“We remain on track to meet our fiscal deficit target for 2026,” he said, adding that they project a deficit-to-GDP ratio of 5.44 percent in the second half of 2026.

“[This would bring] the full year to 5.45 percent, our lowest deficit-to-GDP ratio since the start of the administration,” Go said.

The Department of Budget and Management earlier reported that the national government’s outstanding debt is expected to increase to a record P21.479 trillion by the end of 2027.

READ: PH gov’t debt seen surging to record high P21.5T in ’27

As of June this year, the Philippine government had P19.07 trillion in outstanding debt. /mcm