P17.7 Trillion Debt Soars: Mindanao Families Feel the Pinch

COTABATO CITY / DAVAO / ZAMBOANGA  (February 5) – The Philippine government ended 2025 with a record P17.71 trillion debt, and in Mindanao, residents are already feeling the impact on prices, livelihoods, and local programs.

According to the Bureau of the Treasury (BTr), the national debt rose 10.3 percent from 2024, fueled by domestic and foreign borrowings to fund infrastructure, social programs, and development initiatives. Since President Ferdinand Marcos Jr. took office in July 2022, the government has added P4.91 trillion to the country’s debt stock.

“The increase is due to the government’s strategic net issuance of debt instruments to fund development programs, as well as the valuation effects of peso depreciation against the dollar and third currencies,” the BTr said.

While the Treasury assures that 68.4 percent of borrowings were sourced domestically, local residents say the debt is already affecting their daily lives.

In Cagayan de Oro, sari-sari store owner Lito Deguzman says rising prices are hard to ignore.

“Every time the peso weakens, our suppliers raise prices. I know it’s not just inflation—it’s the government borrowing more,” Deguzman said. “It affects what we pay for goods and what customers can afford.”

Farmers in Bukidnon and North Cotabato also fear that rising debt payments may reduce support for fertilizers, farm equipment, and crop loans.

“We depend on government support during planting season,” said Mariam Delmar, a farmer in North Cotabato. “If more money goes to debt payments, what’s left for our farms?”

Debt breakdown for 2025:

• Domestic debt: P12.12 trillion (+10.9% from 2024), mostly from government securities and Retail Treasury Bonds
• External debt: P5.59 trillion (+9.2%), driven by global bond issuances, concessional loans, and peso depreciation
• Net domestic financing: P1.18 trillion, showing strong investor confidence
• Net external financing: P317 billion, largely concessional, supporting infrastructure, social reform, agriculture, and industry
• Guaranteed obligations: P344.57 billion, just 1.2% of GDP, minimizing contingent debt risks

Economists warn that fast-growing debt can indirectly hit households, particularly through higher inflation, taxes, or cuts in social and rural programs.

“Debt itself isn’t bad if used productively,” said Dr. Elena Cruz, an economist. “But ordinary Filipinos feel it when borrowed funds are not efficiently spent or when interest payments crowd out essential services.”

The government emphasizes that prioritizing peso-denominated borrowing and mostly concessional external loans mitigates risk, while funding roads, schools, hospitals, and farm support that could improve daily life in Mindanao.

Still, for residents like Deguzman and Delmar, the debt isn’t just a number—it’s shaping the cost of living, the stability of livelihoods, and the opportunities for the next generation.

“We hope the money borrowed is really used for programs that help us here in the barangay,” Delmar said. “Otherwise, we’ll just be paying interest while nothing changes on the ground.”