The Philippine government’s outstanding debt climbed to a record ₱19.66 trillion in September, bringing it close to the Marcos administration’s year-end target of ₱19.77 trillion.

The debt stock increased by 0.27% from August and 12.63% from a year earlier, according to the latest data from the Bureau of the Treasury (BTr). Since the start of 2026, government debt has grown by 11.03%, or nearly ₱2 trillion.

The increase reflects additional borrowings and the weaker peso, which raised the peso value of the government’s foreign currency-denominated liabilities.

Domestic debt accounts for more than two-thirds of total

Domestic debt made up 67.39% of the government’s total outstanding debt in September.

It rose by 0.07% month-on-month to ₱13.25 trillion, as the government borrowed ₱7.66 billion more from local creditors than it repaid during the month.

The weaker peso also added ₱1.12 billion to the peso value of the government’s dollar-denominated bonds issued in the domestic market.

The peso ended September at ₱62.601 against the US dollar, weaker than its ₱62.209 level at the end of August.

Since the beginning of the year, domestic debt has increased by 9.34%, or ₱1.13 trillion.

“The increase reflects the cumulative effect of financing activities, together with valuation effects arising from exchange rate movements,” the Treasury said.

Foreign debt rises on peso depreciation

Meanwhile, the government’s foreign debt increased by 0.70% to ₱6.41 trillion in September.

The increase was mainly driven by the ₱40.12-billion rise in the peso value of external liabilities as the local currency depreciated. The government also borrowed ₱9.27 billion more from foreign creditors than it repaid during the month.

External debt has grown by 14.67%, or ₱820.43 billion, since the start of 2026.

A weaker peso can increase the peso cost of servicing foreign currency-denominated debt, even when the amount owed in dollars has not changed.

Government borrows to fund budget deficit

The government borrows from domestic and foreign creditors to help finance its budget deficit, which is projected to reach ₱1.658 trillion, or 5.4% of gross domestic product (GDP), this year.

The government’s debt-to-GDP ratio, which compares outstanding debt with the size of the economy and is used as an indicator of its capacity to repay borrowings, is expected to reach 64.9% in 2026.

The ratio is projected to ease to 64.4% in 2027 and eventually decline to 63% by 2030.

However, the debt-to-GDP ratio stood at 66% as of the first half of 2026, above the government’s full-year projection.