MANILA – The Philippine government’s outstanding debt ballooned to P17.56 trillion in October, a P106.78 billion or 0.61% jump from September, as the weakening peso amplified the peso value of foreign obligations and pushed the Marcos administration’s full-year borrowing goal into the red. The figure, released by the Bureau of the Treasury (BTr), marks a return to record highs last seen in July, eclipsing the P17.36-trillion target by 1.13% and underscoring the currency’s role as a fiscal wildcard amid domestic scandals and global jitters.
The peso’s slide – hitting a low of 59.13 to the dollar on October 28 – was the chief culprit, inflating the peso-denominated worth of external liabilities even as net issuances remained modest. Domestic debt climbed to P12.05 trillion (68.6% of the total), up from P11.97 trillion, with P70.65 billion in new government securities issuances and an additional P1.78 billion tacked on from currency effects for retail dollar bonds. External debt swelled to P5.52 trillion, driven by P58.64 billion in revaluation gains lost to the peso’s tumble, while obligations rose 0.72% to P2.81 trillion from P2.79 trillion.
Economists chalked up the uptick to a “weak fiscal impulse” rather than robust spending, despite October’s budget surplus – which surged 76% from the prior year and notched the first gain since April. “The expansion was due to net issuances of domestic and external liabilities, as well as the upward revaluation effects of the weaker peso against the US dollar,” the BTr explained, highlighting its focus on “prudent debt and risk management” to align borrowings with long-term sustainability.
The peso’s woes, exacerbated by the ongoing flood control corruption controversy, have kept debt stubbornly high, reversing a brief easing in August and September. S&P Global Ratings, reaffirming the country’s BBB+ long-term credit rating with a positive outlook, expressed confidence in a “temporary economic slowdown” and projected recovery within one to two years through fiscal consolidation, stabilized debt levels, and a robust external position.
For a nation eyeing 2026 midterms and ASEAN chairmanship, October’s debt dash serves as a stark reminder: In the Philippines’ fiscal tango, a wobbly peso can turn a surplus step into a stumble, but with reforms on the horizon, the rhythm might yet rebound.