NG debt service bill hits P2.1 trillion in 2025

By Justine Irish D. Tabile, Senior Reporter

THE NATIONAL GOVERNMENT (NG) debt service payments jumped to P2.1 trillion in 2025, surpassing the government’s own program which signals mounting fiscal pressures.

Data from the Bureau of the Treasury showed that NG’s debt repayments rose by 4.08% in 2025 from the P2.02 trillion recorded in 2024. It also exceeded the P2.05-trillion full-year program for debt payments by 2.6%.

Debt service refers to payments made by the NG on its domestic and foreign debt.

More than half, or the bulk, or 58.91% of total debt payments came from amortization payments.

Principal payments slipped by 1.46% to P1.24 trillion in 2025 from P1.26 trillion in the previous year. This was 3% higher than the P1.2-trillion program for the year.

Amortization on domestic debt dipped by 0.26% annually to P1.015 trillion in 2025 from P1.018 trillion in 2024.

Principal payments on foreign debt went down by 6.53% to P223.669 billion last year from P239.293 billion in 2024.

On the other hand, interest payments went up by 13.2% to P864.139 billion in 2025 from P763.313 billion in 2024. It was 1.9% higher than the P848.031-billion program for the full year.

Interest paid on domestic debt went up by 17.6% to P634.846 billion in 2025 from P539.829 billion in 2024.

Broken down, P416.77 billion went to interest payments for fixed-rate Treasury bonds, P162.74 billion for retail Treasury bonds, and P44.97 billion for Treasury bills.

For external debt, interest payments went up by 2.6% to P229.293 billion in 2025 from P223.484 billion in the year prior.

DECEMBER DEBT SERVICE
In December alone, debt repayments increased by 18.6% to P78.642 billion from P66.3 billion in the same month in 2024.

Month on month, debt repayments fell by 12.6% from P89.97 billion in November.

Amortization payments surged by 80.4% to P15.01 billion in December last year from P8.32 billion in December 2024.

Amortization on domestic debt totaled P6.25 billion in December. There were no payments made on domestic debt in December 2024.

Meanwhile, principal payments on foreign debt went up by 5.22% to P8.754 billion in December from P8.32 billion a year prior.

On the other hand, interest payments increased by 9.75% to P63.63 billion in December from P57.98 billion in the same month in 2024.

Interest paid on domestic debt increased by 11.59% to P41.779 billion from P37.44 billion in 2024.

Broken down, interest payments on retail Treasury bonds stood at P19.18 billion, fixed-rate Treasury bonds at P17.47 billion, and Treasury bills at P3.76 billion.

Interest payments on external debt jumped by 6.41% year on year to P21.86 billion in December from P20.54 billion in 2024.

“The rise in debt service reflects more expensive borrowing from higher rates and heavier repayments,” Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas said in a Viber message.

“In 2026, pressures should stay high but may stabilize if rates ease — so the priority is smart debt management: lock in better rates, extend maturities, and borrow only for growth‑driving projects,” he added.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the higher debt servicing reflects increased NG outstanding debt in recent years.

For the coming months, he said that the country can expect to make bigger debt payments.

“Geopolitical risks, especially in the Middle East since Feb. 28, which led to higher global crude oil prices, could lead to higher inflation and interest rates, which could lead to higher interest payments and debt servicing costs,” he said in a Viber message.

“A higher US dollar-peso exchange rate… would lead to a higher peso equivalent of foreign debts that, in turn, would lead to higher principal servicing costs of foreign debts,” he added.