The Philippines is experiencing a significant increase in its public debt, with a notable rise in repayment obligations as a share of its economic output.

According to the latest Global Debt Monitor report, Philippine government debt has escalated to 57.3 percent of gross domestic product (GDP) in the first quarter of 2025, up from 56.7 percent a year prior.

This increase contrasts with a decline in private sector debts across Filipino households and non-financial corporations.

Household debt as a percentage of GDP decreased to 11.4 percent as of March 2025, down from 12.4 percent in the same period the previous year.

Similarly, the debt-to-GDP ratio for non-financial corporates fell to 25.7 percent in March 2025 from 27.2 percent in the first quarter of 2024. The financial sector maintained its debt level at 7.2 percent of GDP during both periods.

A separate report highlighted that the Philippines’ debt servicing budget averaged 6.2 percent of GDP from 2022 to 2024. This includes amortization or principal repayments, which constituted 3.8 percent of GDP, and interest payments at 2.4 percent.

These debt payments have surpassed allocations for vital sectors such as education, which received an average of 3.6 percent of GDP, health at 1.2 percent, and military expenditures at 1.1 percent during the same timeframe.

In 2025, the Philippine government is set to repay a record ₱2.05 trillion in debt, a slight increase from ₱2.02 trillion in the previous year.

The national government plans to address over ₱1.2 trillion in principal amortization and more than ₱848 billion in interest during the year.

The report indicated a worrying trend for lower middle-income countries (LMICs) like the Philippines, noting that rising interest costs and declining social expenditures have been observed from 2018 to 2024. The government plans to borrow a gross amount of ₱2.55 trillion this year, primarily from domestic sources, which will account for approximately ₱2.04 trillion of the total.

This approach aims to mitigate foreign exchange risks, as the domestic debt market remains flush with capital.

Projections for the national government’s outstanding debt foresee a rise to ₱17.35 trillion by the end of 2025. On a broader scale, total debt across emerging markets surged beyond $106 trillion in the first quarter of 2025, marking the debt-to-GDP ratio for these regions at an unprecedented 245 percent.

This increase has been primarily attributed to China, which represented over $2 trillion of the surge, with its government debt rising from 60 percent of GDP in 2019 to exceeding 93 percent currently.

Globally, total debt has reached over $324 trillion, influenced partially by a decline in the value of the dollar, reflecting a marginal reduction in global debt as a share of GDP, which stands near 325 percent, primarily propelled by trends in mature markets.