France now pays more than Italy to borrow. Where does the Philippines stand on debt, yields and ratings?

For most of the past twenty years France borrowed like a core euro-area economy and the Philippines like an emerging market. In October 2026 France is paying more than Italy for ten-year money, and the distance between Paris and Manila is smaller than it was before the pandemic. It has not closed, and the reasons say a lot about what a bond yield actually measures.

What is happening to French government bonds?

France’s 10-year yield closed at 4.79% on 16 October 2026, 137.4 basis points above Germany’s 3.42%, according to Banque de France and Bundesbank data compiled by ideal-investisseur. The spread over Germany was 84.9 bp on 2 September and peaked at 146.9 bp on 2 October, its widest in a year. Italy’s 10-year was about 4.50% on 16 October (Trading Economics), so France paid roughly 29 bp more than Italy, a reversal from mid-2025, when Italy still paid more.

French 10-year yield, close on 16 October 2026 (Banque de France TEC10). On 2 October it reached 4.994% intraday, the highest since 2002, according to Reuters via Boursorama.

The pressure is fiscal and political. The 2027 budget presented on 1 October aims to cut the deficit from 5.4% of GDP in 2026 to 5.0% in 2027 (Euronews), while government debt on the Maastricht definition is planned to rise from 119.3% to 121.7% of GDP (Upside). Prime Minister Sébastien Lecornu has no majority in the National Assembly, and the first vote is on Tuesday 20 October.

How does the Philippines compare on the same yardstick?

On IMF numbers the Philippines carries about half France’s debt load, runs a smaller deficit and grows faster. The table uses a single source, the IMF World Economic Outlook of October 2026, for general government gross debt, the general government balance (net lending/borrowing) and real GDP growth. The 2026 values are IMF estimates.

Visual guide

How does the Philippines compare on the same yardstick?

Debt, 2026

• Philippines60.5
• France118.5
• Italy137.9
• Germany64.6
• Indonesia41.7
• Thailand67.2

0137.9

Economy	Debt, 2019 (% of GDP)	Debt, 2026	Change since 2019	Balance, 2026	Growth, 2026
Philippines	37.0	60.5	+23.5 points	−4.2	3.4%
France	98.2	118.5	+20.3 points	−5.4	0.4%
Italy	133.9	137.9	+4.0 points	−2.9	0.8%
Germany	58.3	64.6	+6.3 points	−4.3	1.3%
Indonesia	30.6	41.7	+11.1 points	−2.9	5.1%
Thailand	41.1	67.2	+26.1 points	−3.3	2.1%

One column deserves a second look. Since 2019 the Philippine debt ratio has risen by 23.5 points, a little more than France’s 20.3. The level is far lower, but the direction is the same. The IMF projects the Philippine ratio flat at 60.5% in 2027, against 120.4% for France.

Local figures use other definitions. The Bureau of the Treasury put national government debt at ₱19.61 trillion at end-August 2026, 67.53% domestic and 32.47% external, excluding ₱306.74 billion of guarantees (BTr, 30 September 2026). The DBCC programmes a national government deficit of 5.4% of GDP for 2026 (DBCC statement, 8 July 2026). That happens to be France’s number too, but it covers a narrower part of government than the IMF’s −4.2%, so the two should not be mixed in one comparison.

Who pays more to borrow for ten years?

The Philippines, by about 3.2 percentage points. The Philippine 10-year yield was 8.0184% on 16 October 2026 on the BVAL reference rates published by the Philippine Dealing System, up 14.47 bp on the week, as reported by BusinessWorld. France closed at 4.79% the same day.

Philippine 10-year (8.0184%, BVAL) minus French 10-year (4.79%, Banque de France), 16 October 2026. The two come from different sources and closing times. CapsWindow calculation.

Much of that headline gap is the policy rate itself. The BSP has raised its target RRP rate three times since April, to 5.00% (BSP, 27 August 2026), while the ECB’s deposit rate is 2.50%.

Market	10-year yield (16 Oct 2026)	Policy rate	10-year minus policy rate
Philippines	8.02%	5.00% (BSP target RRP)	+3.02 points
France	4.79%	2.50% (ECB deposit rate)	+2.29 points
Germany	3.42%	2.50% (ECB deposit rate)	+0.92 points

After subtracting each policy rate, the Philippine 10-year stands only 0.73 point further above its policy rate than France’s does. The more telling comparison is inside the euro area: under the same ECB rate, France’s long yield sits 1.37 points further above it than Germany’s. That is the premium markets now charge France specifically.

Why do the debt ratio and the yield tell different stories?

Because a 10-year yield prices more than the size of the debt. Three things stand out in the Philippine figures.

Inflation. Headline inflation was 7.2% in September 2026, more than double the BSP’s 3% target. Anyone lending pesos for ten years wants to be paid for that risk. Subtracting September inflation from the 8.02% yield leaves about +0.8 point, a thin real return (CapsWindow calculation; the yield and inflation dates differ).

Currency. A foreign holder of a peso bond also holds the peso. The peso closed at a record low of ₱63.06 per US dollar on 15 October, the first close above ₱63 (BusinessWorld). France borrows in the euro, a reserve currency shared across the euro area.

Emerging-market pricing. Investors tend to price markets in groups. Indonesia, with a debt ratio of 41.7%, paid 7.24% on its 10-year on 15 October; Thailand, at 67.2%, above the Philippines, paid 2.31% (ADB AsianBondsOnline, data: Bloomberg). Thailand’s 1.00% policy rate and 2.82% September inflation explain more of its yield than its debt does. In Southeast Asia the 10-year yield follows inflation and policy rates more closely than debt ratios.

France is the mirror image. Markets tolerated a debt ratio near 100% at very low yields for years. What changed in 2026 is the politics around the budget, not a sudden jump in the debt.

Has the gap between the Philippines and France narrowed?

Yes, compared with the years before the pandemic, although it widened again in early 2026. The table uses monthly averages: the ECB’s convergence-criterion series for France and daily ADB AsianBondsOnline closes for the Philippines. The last row uses the daily figures above.

Period	Philippines 10-year	France 10-year	Gap (calculated)
2019 average	5.34%	0.13%	5.21 points
2022 average	6.34%	1.70%	4.64 points
2025 average	6.13%	3.37%	2.76 points
December 2025	5.99%	3.56%	2.43 points
May 2026	7.49%	3.74%	3.75 points
September 2026	7.50%	4.44%	3.06 points
16 October 2026 (daily)	8.02%	4.79%	3.23 points

In October 2018 the monthly gap reached 7.17 points, its widest since the Philippine series begins in 2007. By December 2025 it was 2.43 points, the narrowest since June 2014. The narrowing came mostly from France: its 10-year rose from near zero in 2019 to 4.44% in September 2026, the highest monthly average since July 2008, while the Philippine yield in 2025 was less than a point above its 2019 average.

In 2026 Philippine yields first rose faster, as oil prices and inflation climbed, and the gap widened to 3.75 points in May. Since then French yields have caught up. Put another way, France’s 4.79% on 16 October is higher than the Philippine 10-year monthly average in 84 months between November 2012 and September 2021.

How do the credit ratings compare?

On Moody’s scale, the Philippines is five notches below France and one notch above the lowest investment grade, Baa3.

Agency	France	Philippines
Moody’s	Aa3, negative outlook (10 April 2026)	Baa2, stable outlook (affirmed 24 August 2026)
S&P	A+, stable outlook (29 May 2026)	BBB+, outlook revised to stable from positive (reported 9 April 2026)
Fitch	A+, stable outlook (28 August 2026)	BBB, outlook revised to negative from stable (20 April 2026)

France’s ratings are from Agence France Trésor and the Philippine Moody’s rating from the Department of Finance. The Philippine S&P and Fitch entries are from news reports, because the agencies’ and the BSP’s own pages could not be opened for this note: the Inquirer for S&P, and Bloomberg and the Inquirer for Fitch. On those scales the Philippines is three notches below France at S&P and four at Fitch, and two of the three agencies have lowered their Philippine outlook this year.

In affirming the rating, Moody’s cited strong access to domestic and international funding, adequate foreign-currency reserves, and the Treasury’s longer maturities and mostly fixed-rate, local-currency debt, which it said protect the government against high refinancing costs and interest-rate risk. That last point matters when yields rise: a higher market rate reaches the budget only gradually, as old debt is refinanced.

Ratings and yields measure different things. France at Aa3 pays 4.79%; the Philippines at Baa2 pays 8.02%. The rating is an agency’s view of default risk; the yield also carries inflation and currency.

Which numbers are worth watching?

Three, more than the debt ratio itself.

• Speed. The Philippine debt ratio has risen 23.5 points since 2019 on the IMF’s measure. Whether it holds at 60.5% in 2027, as the IMF projects, matters more than how it compares with France.
• Interest. France’s general government interest bill is planned to rise from €79 billion in 2026 to €91 billion in 2027, about 2.9% of GDP (Upside). For the Philippines, a 2026 interest-to-revenue ratio could not be confirmed from Treasury data for this note; the monthly cash operations reports are the place to check.
• Growth. The IMF expects 3.4% growth for the Philippines in 2026, and the DBCC assumes 3.5% to 4.5%. Debt ratios fall more easily when the economy grows faster than the debt.

The next dates are close together: France’s first budget vote on 20 October and the BSP’s Monetary Board meeting on 22 October.

Open the past money calculator →