The Marcos administration is charting a path towards fiscal consolidation by reducing borrowings next year, data from the Department of Budget and Management (DBM) showed.
Based on the Budget of Expenditures and Sources of Financing presented to Congress, the government is planning to borrow P2.545 trillion in 2025, a slight decrease of one percent compared to P2.57 trillion this year.
The DBM data indicated that this reduction is primarily driven by decreased borrowings from external sources, which have fallen 21 percent to P507.41 billion from this year's total of P646.08 billion.
Of the total borrowing planned, the government has allocated P236.1 billion for program loans, P197.75 billion for commercial borrowings and other inflows, and P73.55 billion for project loans.
Foreign financing is set to make up 20 percent of President Marcos' 2025 borrowing plan, with the remaining 80 percent to be raised through the domestic market.
On the other hand, the government has increased its domestic financing target for the next year by six percent to P2.037 trillion from P1.923 trillion in the current year.
The majority of local financing will be sourced through the issuance of short-term debt papers totaling P1.977 trillion, an increase from the P1.872 trillion issued this year. The remaining balance will be secured through the sale of Treasury bills.
Earlier, the Development Budget Coordination Committee (DBCC) revised its fiscal program for the years 2025 to 2028.
Budget Secretary Amenah F. Pangandaman said that the adjustment was crucial to provide the necessary financial flexibility to support the government's projects and programs.
Under the Marcos administration's revised plan, a fiscal deficit of 3.7 percent of the economy is projected by the conclusion of its term in 2028.
The DBCC, an inter-agency body responsible for setting the government's macroeconomic assumptions, recently increased the budget deficit ceiling this year from 5.1 percent to 5.6 percent.
The national government also increased its borrowing to P2.57 trillion in 2024 from the original P2.46 trillion.
Specifically, the government plans to borrow P1.927 trillion from the local market, while the remaining P624 billion will come from external sources.