The Marcos administration cut its debt payments by nearly half a trillion pesos in the first seven months of 2025, even as the country’s total obligations soared to an all-time high of ₱17.56 trillion, Bureau of the Treasury (BTr) data showed.
From January to July, total debt service dropped to ₱876 billion, a steep 35.7 percent decline from ₱1.36 trillion in the same period last year. The sharp fall was largely due to a drastic reduction in principal payments, which plunged to ₱355.1 billion compared to ₱907.3 billion in 2024 — a 60.9 percent cut.
The impact was most visible on domestic creditors, who received just ₱170.6 billion during the period, a staggering ₱587 billion or 77.5 percent less than last year’s ₱757.6 billion. Payments to foreign lenders, on the other hand, rose 23.3 percent to ₱184.5 billion, but the increase was too small to offset the decline in domestic amortization.
Interest expenses, however, continued to climb. The government shelled out ₱521 billion in interest payments by end-July, 14.1 percent higher than last year’s ₱456.7 billion. Domestic lenders absorbed the bulk at ₱382.7 billion, while foreign creditors received ₱138.3 billion. Treasury bonds remained the biggest recipient, with ₱267.3 billion going to fixed-rate T-bonds.
In July alone, debt service reached ₱108.1 billion, up 33.1 percent year on year, as interest payments surged to ₱106.2 billion.
Meanwhile, the national debt breached the government’s full-year projection of ₱17.36 trillion just seven months into 2025. The current ₱17.56 trillion tally is already ₱200 billion above target and 12 percent higher than last year’s ₱15.69 trillion.
Despite the overshoot, Finance Secretary Ralph Recto maintained that year-end debt will remain at programmed levels, adding that crossing the ₱18-trillion mark is unlikely.
Borrowings in the same period slightly eased to ₱1.757 trillion from ₱1.759 trillion last year, with a drop in domestic loans balancing out a sharp rise in foreign debt.
