External debt has always been a problem of the Philippine fiscal managers. With the Aquino government in place, debt problem becomes a burning issue. While several options are entertained such as debt repudiation, these are dismissed in the end via the government’s announcement that all debt will be honored in time. This article reviews the current thinking about debt management and several policies that can best support development goals. The author points out that the policy stance to the debt problem should be contained in a debt package that gives consideration to economic objectives.