Marcos admin increases borrowing by 23%, driven by domestic debt

The Marcos administration borrowed more from local and foreign sources in the first 10 months of the year to bridge the government's budget deficit.

Data from the Bureau of the Treasury showed that the national government's gross financing rose by 23 percent from January to October 2024 to P2.429 trillion, from P1.975 trillion in the same period last year.

The increase in borrowing was driven by the government securing P129.26 billion worth of loans from domestic and foreign creditors in October. However, this amount is significantly less than the P225.2 billion borrowed in the same month of 2023.

According to the Treasury report, the decline in October borrowing was due to the government reducing its offshore financing from P174.63 billion last year to P67.46 billion.

Conversely, the government increased its domestic financing by 22 percent during the month, to P61.8 billion from P50.57 billion.

With the additional borrowings in October, total gross financing from foreign creditors reached P556.25 billion in the first 10 months of the year, an increase from P456.31 billion a year ago.

Similarly, total domestic borrowing jumped 22 percent to P1.863 trillion at the end of October, from P1.519 trillion in the previous year.

President Marcos' total borrowing in the first 10 months of the year represents 94.5 percent of the national government's full-year program of P2.57 trillion.

Last week, the Treasury reported that the government swung to a budget surplus in October of P6.3 billion, a turnaround from the P34.4 billion deficit in the same month a year ago.

In the first 10 months, the budget deficit narrowed to P963.9 billion from P1.02 trillion in 2023.

As of the end of October, the shortfall represents only 64.94 percent of the P1.48 trillion deficit ceiling for the year.

For the total borrowing plan in 2024, P1.92 trillion will come from domestic sources and $1.08 billion from overseas, according to the Department of Budget and Management.

As of September, the government's outstanding debt reached a record-high P15.89 trillion, a 2.2 percent rise in state obligations in September, adding P343.11 billion to the previous month's total.

Year-on-year, the government debt increased 11.4 percent.

Domestic borrowings, representing 68.81 percent of the total debt, reached P10.94 trillion, a 1.3 percent uptick from the previous month. This increase was fueled by a P145.11 billion net issuance of new government securities.