The Bureau of the Treasury (BTr) data showed Philippines’ running sovereign debt balance ballooned to a new record high P16.68 trillion as of March 2025 amid the government’s fundraising efforts to bankroll key programs.

The national government’s outstanding debt of P16.68 trillion up 0.31% from P16.63 trillion as of end-February this year.

But, the Treasury said the sovereign debt stock “remains manageable,” noting that the majority of the state’s obligations were sourced domestically at 68.2% while only 31.8% came from foreign sources.

“This financing mix reflects a prudent approach to debt management to help mitigate exposure to external risks while taking advantage of the country’s liquid domestic market,” it said.

The government’s domestic debt, in particular, grew to P11.38 trillion from P11.22 trillion month-on-month.

The BTr said this was mainly due to the net issuance of domestic securities worth P157.86 billion, “demonstrating strong investor confidence in government instruments.”

“The increase was partially offset by the peso’s continued appreciation, which resulted in a P2.03 billion downward revaluation,” the BTr said.

External debt, meanwhile, amounted to P5.30 trillion as of end-March, down from P5.41 trillion in the prior period.

“The reduction was primarily due to the P66.22 billion decrease in the peso equivalent of US dollar-denominated debt behind local currency appreciation, as well as the net repayment of external loans, which further trimmed the external debt total by P60.84 billion,” the Treasury said.

“These more than offset the P23.19 billion upward revaluation effect of third-currency movements against the US dollar,” it added.

Despite the rising debt balance, the Treasury said that the “robust” revenue performance in the first quarter “has enabled the government to finance key priority programs without imposing new taxes, keeping debt growth well within sustainable levels.”

Total government revenues for the first three months of the year grew by 6.90% from P933.7 billion year-on-year “due to the strong performance of the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC).”

The bulk of the total revenues during the period were tax collections which stood at P931.5 billion, up 13.55% from P820.4 billion a year earlier.

In particular, the BIR recorded a 16.67% growth in tax collections, reaching P690.4 billion “due to higher collections from personal income tax (PIT), corporate income tax (CIT), percentage taxes, value-added tax (VAT), excise taxes, documentary stamp tax, and percentage taxes.”

Meanwhile, the BOC saw a 5.72% increase in collection to P231.4 billion, “due to higher VAT from non-oil imports and excise tax collections from oil and non-oil imports.”

“With the economy continuing to grow faster than its obligations, the country remains firmly on track to achieve fiscal consolidation and reduce the debt-to-GDP ratio to below 60% by 2028,” the Treasury said.

A lower debt-to-GDP ratio indicates the country’s ability to repay its debt without negatively impacting the economy.

The country’s debt-to-GDP ratio stood at 60.7% as of the end of 2024—slightly above the internationally accepted comfortable threshold of 60%.

The BTr said the Marcos administration “has inherited a large debt due to the pandemic.”

It said that the current administration carried on an approximately P12.79 trillion, “but it has already made improvements to the country’s debt statistics by reducing the debt-to-GDP ratio to 60.7% in 2024…”

“This was done by expanding the country’s GDP to P26.44 trillion in 2024,” the Treasury said.

The Marcos administration’s Medium-Term Fiscal Framework (MTFF) aims to reduce the debt-to-GDP ratio to 56.9% by 2028.

The Treasury further said that 91.5% of the outstanding debt as of end-March carries fixed interest rates, insulating the country from sudden shifts in global interest rates and currency movements.

“In addition, 81.3% of the obligations are long-term, giving the government ample fiscal space and time to support growth-enhancing investments,” it said.

“Moreover, the country’s recent credit rating upgrades and reaffirmations underscore strong investor confidence in the country’s economic fundamentals, translating to greater demand for Philippine bonds, thereby preserving government access to reasonable borrowing costs, crucial for sustaining the country’s inclusive growth momentum,” it added.