By Justin Irish D. Tabile, senior correspondent
The debt service bill of the national government (NG) rose by nearly 30% to P137.67 billion in January amid higher interest payments, the Bureau of the Treasury (BTR) said.
The latest data from the Treasury showed that the debt service bill in January increased by 29.3% from P106.51 billion in the same month last year.
Month-on-month, the debt service bill increased 75% from P78.64 billion in December.
Debt service refers to payments made by the government on domestic and foreign borrowings.
Ser Percival K., director of the Ateneo Center for Economic Research and Development. Pena-Reyes told businessworld The higher debt service bill in January is due to “more expensive loans amid higher interest rates, larger total loan stock and front loading of repayments at the beginning of the year.”
“These factors combined to increase total loan payments, even if some components (such as principal) did not increase as dramatically,” he said in a Viber message.
BTR data shows that the majority, or 92.8%, of loan repayments were made up of interest payments.
In January, interest payments rose 22.4% to P127.82 billion, from P104.44 billion in the same month a year ago.
Domestic interest payments also rose 30.9% to P94.6 billion in January from P72.29 billion in the same month last year.
Broken down, P85.4 billion went into fixed-rate treasury bonds, P3.68 billion into treasury bills, P3.58 billion into retail treasury bonds, and P1.95 billion into others.
Interest payments for foreign borrowings rose 3.3% to P33.2 billion in January from P32.15 billion in the same month of 2025.
As interest rates remain high, Mr. Pena-Reyes said interest payments will remain the bulk of the debt service bill in the near term.
“What we're seeing is probably a mix of structural pressures, which are persistent, and time or base effects, which are not,” he said.
Jose Enrique “Sonny” A., executive director of the think tank IBON Foundation. Africa said higher debt service is “the inevitable consequence of the ever-increasing debt stock due to higher rates and foreign exchange effects.”
“External interest payments will definitely continue to increase, especially as the peso weakens further,” he said.
The local currency hit a new record low, closing at P60.69, 14 centavos weaker than its P60.55 on Monday, data from the Bankers Association of the Philippines showed.
Meanwhile, amortization payments rose 374.8% to P9.85 billion in January from P2.08 billion in the same month a year ago.
This was mainly made up of principal payments on household loans, which rose 2,453.9% to P8.1 billion in January from P317 million in the same month last year.
Amortization paid on foreign debt was steady at P1.76 billion in January.
“Higher household amortization in January 2026 implies mainly scheduled repayments and active loan rollovers, not necessarily fiscal stress,” Mr Pena-Reyes said.
“However, along with rising interest payments, it also exposes a heavy overall debt service burden, even if the month-on-month structure looks unsustainable,” he said.
Mr Africa of the IBON Foundation said higher household amortization indicates increasing rollover dependence and liquidity pressures.
“The Philippines is on the right strategic path with its long-standing bias for domestic borrowing, which now becomes even wiser amid volatility when external markets must be used selectively,” he said.
However, he said that the country needs Fix structural fiscal gap to avoid compounding debt service.
“The emphasis should not just be on debt management mechanisms, but also on who will bear the burden of the current shock and how to prevent rising inequality and recession,” he said.
Frontloaded financing programs led NG loan stock to rise to P18.13 trillion at the end of January, 2.41% higher than the P17.71 trillion seen at the end of December.
“Frontloading sounds like the right thing right away, but could prevent higher interest rates, and kind of turn today's oil shock into tomorrow's financial crisis,” Mr. Africa said.
He said, “There is an unspoken policy bias toward protecting creditors rather than those in need, where relying on borrowing rather than progressive taxes, such as on the wealth or windfall profits of billionaires, is a form of socializing the costs of supply-side shocks while privatizing the benefits.”