The Marcos administration ramped up its domestic borrowing, causing a substantial increase in the government's overall financing in the first half of the year compared to the previous year.
Data released by the Bureau of the Treasury showed that the national government's gross borrowings totaled P1.57 trillion from January to June, a 13 percent increase from the P1.391 trillion borrowed in the same period in 2023.
The main driver behind this surge in government borrowing was its heavy reliance on local sources, the Treasury document showed.
In particular, the national government's borrowings from domestic creditors soared 27 percent to P1.303 trillion by the end of June this year, from the P1.024 trillion borrowed locally in the previous year.
The bulk of these borrowings took the form of fixed-rate treasury bonds, with the government issuing P609.21 billion worth of long-term IOUs.
Additionally, the government raised P584.86 billion from small Filipino investors through the sale of retail Treasury bonds in February.
Moreover, the government secured an additional P109.07 billion through the auction of regular Treasury bills in the first half of the year.
In contrast, foreign borrowings registered a 27 percent decline in the first semester from P366.44 billion to P67.4 billion.
The largest portion of the external financing came from the proceeds of the sale of global bonds in May, totaling P115.25 billion, followed by program and project loans from the country's development partners, amounting to P100.5 billion and P51.67 billion, respectively.
The government's end-June gross borrowings represented 61 percent of the Marcos administration's full-year 2024 program totaling P2.57 trillion.
In June alone, the government secured loans amounting to P148.17 billion from both local and foreign creditors, a decrease from the P166.49 billion borrowed in the same month the previous year.
For 2025, the government is planning to borrow P2.545 trillion in 2025, a slight decrease of one percent compared to this year.
The reduction was 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.