The Department of Finance (DOF) said on Thursday the national government continues to manage the large debt it has inherited from the previous administration even as the debt stock hit a record P16.753 trillion as of end-April.
The DOF said in a statement by growing the economy faster, borrowings are kept at a sustainable level and below the 70 percent international threshold for the debt-to-gross domestic product (GDP) ratio.
The Philippines’ debt-to-GDP ratio stood at 62 percent as of March, Bureau of the Treasury data showed. For full-year 2024, the debt-to-GDP level was at 60.7 percent.
“As of end-April 2025, the national government’s total outstanding debt stood at P16.75 trillion, relatively lower than in most countries in Asia, according to the latest available data.
Japan’s total debt is at P485.94 trillion; Singapore’s at P53.68 trillion; South Korea’s at P46.89 trillion; Indonesia’s at P31.37 trillion; and Thailand’s at P17.73 trillion, the DOF said.
According to figures available online as reported by economic data provider Trading Economics, the debt-to-GDP ratios of those countries in 2024 stood at 236.7 percent for Japan; 173.1 percent for Singapore; 46.8 percent for South Korea; 38.8 percent for Indonesia and 63.7 percent for Thailand.
The DOF pointed out that the current administration inherited a debt of P12.79 trillion when it took office in 2022.
It said that the Duterte administration added P6.84 trillion in debt due to the pandemic, surpassing the combined borrowings of all previous administrations from Ferdinand Marcos Sr.’s P365 billion; Corazon Aquino’s P372 billion; Fidel Ramos’ P681 billion; Joseph Ejercito Estrada’s P766 billion; Gloria Macapagal Arroyo’s P2.4 trillion; and Benigno Aquino III’s P1.37 trillion.
Despite this, the DOF said the country remains firmly on track to reduce the national government debt-to-GDP ratio to below 60 percent by the end of President Marcos Jr.’s term.
As of the end of April, the country’s domestic debt continued to comprise the majority, or 69.2 percent, of the total debt stock, while external obligations accounted for only 30.8 percent.
“Since a large chunk of the borrowing remains local, this means that the interest payments are being circulated back into the economy,” the DOF said.
The DOF stated that the BTr is adopting an 80:20 borrowing mix strategy, favoring domestic sources to support the development of local capital markets and mitigate foreign exchange risks.
Moreover, 91.5 percent of the government’s borrowing consists of fixed interest rates, which shields the country from sudden increases in interest and exchange rates, the department said.
On the other hand, 81.3 percent of the country’s borrowings have long-term repayment periods, creating ample fiscal space for the government to allocate funds for economic growth.
The DOF likewise highlighted the intensified tax administration efforts, with tax collections continuing to post double-digit increases, allowing the government to fund the priority programs and projects without imposing new taxes on the people and keeping debt growth well within sustainable levels.
The country’s fiscal deficit has also been steadily narrowing, the DOF said, dropping to 5.7 percent of GDP in 2024, a significant improvement from the pandemic peak of 8.6 percent in 2021, 7.3 percent in 2022, and 6.2 percent in 2023. This is on track to decline to about 3.8 percent by 2028.
The DOF said the government’s strict adherence to fiscal discipline has earned it a recent credit rating upgrade of A- from Japan’s Rating and Investment Information Inc. and an outlook upgrade to positive from S&P Global.
“Securing a credit rating upgrade and affirmation signals high investor confidence in the Philippines’ economic performance, increasing investor interest in Philippine bonds and resulting in lower borrowing costs for the government,” the DOF said.
“In return, these borrowings are reinvested into the economy through growth-enhancing investments, such as infrastructure, education, agriculture, health, and social services that produce more jobs for the Filipino people,” it added.
