Arthur Fuentes

Photo illustration of US dollar to PH peso exchange in this photo taken on September 30, 2022. Gigie Cruz, ABS-CBN News

Article (news)

Peso dollar

ABS-CBN News

MANILA — The Philippines&#x27; foreign debt declined for the second straight month in May thanks to the strengthening of the peso, the Bureau of Treasury said on Thursday.Despite this, the country&#x27;s total debt still climbed as the government continued to borrow more to finance its fiscal deficit.Treasury said the national debt edged up to P16.92 trillion at the end of May, which was just 0.99 percent higher than the P16.75 trillion seen in April. The bureau said this is because of successful net issuances of new domestic securities, which it said reflects &quot;sustained investor confidence in the Philippine economy.&quot;The agency also noted that the stronger peso during the month helped temper the rise in domestic debt, while trimming the external debt.Domestic debt reached P11.78 trillion as of end-May 2025, slightly up by 1.64 percent or P189.96 billion from the previous month. But this was slightly tempered by the P0.91 billion downward valuation effect of a stronger peso against the US dollar, Treasury said.Foreign debt, meanwhile, declined by 0.46 percent or P23.76 billion from April, bringing the total to P5.14 trillion as of end-May 2025.&quot;The decrease was due to P3.55 billion in net repayments and the strengthening of the peso, which reduced the peso value of foreign debt by P29.35 billion. These were partly offset by a P9.14 billion revaluation resulting from third-currency fluctuations against the US dollar,&quot; Treasury said.The local currency strengthened to P55.615 to $1 in May from P55.933 in April. In May last year, the exchange rate was P58.524 to $1.&quot;Domestic borrowings continued to comprise the majority of the total debt stock at 69.6 percent, while external obligations account for the remaining 30.4 percent,&quot; Treasury said.&quot;This reflects the government’s strong bias for domestically sourced financing, which helps mitigate foreign exchange risks and strengthen the local capital market,&quot; it added.Some economists have raised concern over the rising debt, but the government has said that the sovereign debt is not a cause for worry as long as the domestic economy continues to grow faster than the debt.<div><a href="https://www.abs-cbn.com/news/business/2025/6/4/foreign-debt-declines-in-april-as-peso-strengthens-vs-dollar-1348" rel="noopener noreferrer" target="_blank">Foreign debt declines in April as peso strengthens vs dollar</a></div>

The Philippine peso's strength in May helped temper the national debt's rise to less than one percent.

The Philippine peso's strength in May helped temper the national debt's rise to less than one percent.

Foreign debt again slips in May as peso strengthens, but total debt edges up

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Foreign debt again slips in May as peso strengthens, but total debt edges up

Arthur Fuentes,

ABS-CBN News

Published July 03, 2025 06:53 PM PHT

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