Photo credit: Bureau of the Treasury

The Philippine government’s outstanding debt has climbed to P16.31 trillion as of the end of January 2025, marking a P261.47 billion (1.63%) increase from the previous month. But before you panic, let’s break it down:

Why Did the Debt Increase?

Several factors contributed to this rise, but the biggest culprits were:

1. New Loans – The government borrowed both locally and internationally to support economic programs and fund the budget deficit.

2. Peso Depreciation – The peso weakened against the US dollar, from P57.85 in December 2024 to P58.38 in January 2025. This made our foreign debt (which is in dollars) more expensive to repay.

Where Does the Debt Come From?

Domestic Debt (P11.08 trillion or 67.9%) – Mostly from government securities like treasury bonds and bills.

External Debt (P5.23 trillion or 32.1%) – Loans from foreign creditors and international agencies.

What About Guarantees?

The government also has P346.27 billion in guaranteed obligations, but this actually decreased slightly (by P0.39 billion). This means the government paid off some of these debts faster than the impact of currency fluctuations.

What Does This Mean for Filipinos?

While the debt may sound massive, the government assures it’s still manageable and part of a long-term strategy to fuel economic growth. However, expect possible adjustments in tax policies, interest rates, and government spending to ensure that borrowing remains sustainable.

For now, the best thing to do? Stay informed, watch how the economy moves, and be mindful of how government borrowing might impact daily expenses like fuel prices, taxes, and inflation.