THE Philippines has accumulated a record-breaking P18.9-trillion debt burden, which the Bureau of Treasury attributed to the country’s increased borrowings coupled by a rapidly skidding peso value.
According to the BTr, the spike was primarily fueled by the revaluation impact of a sliding peso against the US dollar, which significantly contributed to an inflated cost of servicing foreign-denominated loans.
Last March, the peso weakened by over P3 against the greenback, overshadowing modest gains from debt repayments.
Domestic debt meanwhile reached P12.53 trillion, marking a 0.44 percent increase from the previous month. This growth was driven largely by the net issuance of government securities as Manila continues to tap local markets to fund its national budget, with currency fluctuations adding a further P8.68 billion to the value of foreign-currency domestic holdings.
External debt saw a more dramatic jump, rising nearly five percent to P5.95 trillion by the end of the first quarter. While the government managed net repayments of P2.55 billion, the depreciation of the peso added P299.5 billion to the total valuation of foreign obligations, according to an article posted online by the ABS-CBN.
The Treasury also reported that guaranteed obligations edged up to P381.41 billion, representing a nearly 11 percent increase compared to the end of 2025 as the government continues to navigate global currency volatility.
GIR FELL ALSO
In a related development, the country’s gross international reserves fell by $2.5 billion in April for a second straight month decline from the record level posted in February.
Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed GIR fell to $104.13 billion as of end-April from $106.64 billion a month earlier.
The BSP attributed the decline mainly to lower foreign investments, gold holdings, and foreign exchange reserves.
Foreign investments, which accounted for the bulk of reserves, slipped to $79.20 billion in April from $80.09 billion in March.
Gold holdings fell to $19.78 billion from $20.18 billion, while foreign exchange reserves dropped to $464.9 million from $1.75 billion.
Despite the decline, the BSP said the reserve level remained a “robust external liquidity buffer.”
The April GIR was sufficient to cover 6.9 months’ worth of imports of goods and payments of services and primary income. It was also equivalent to about 3.8 times the country’s short-term external, Reuters explained.
The latest forex reserves represent a “robust” external liquidity buffer equivalent to 6.9 months’ worth of imports of goods, payments of services and primary income, it said in a statement.
GIR consists of foreign‑denominated securities, foreign exchange, and other reserve assets, including gold. GIR helps ensure sufficient dollar liquidity to meet the country’s import needs and foreign debt obligations, address currency volatility, and provide a buffer against external economic shocks.