Both foreign and domestic borrowings of the national government swelled by double digits in the first eight months of the year, leading to a 17.2 percent increase in the Marcos administration’s gross debt to ₱2.27 trillion as of end-August.

Data from the Bureau of the Treasury (BTr) showed that the government’s debt as of end-August flipped from its lower figures at end-July. This year’s gross debt has already overtaken last year’s ₱1.93 trillion.

As of end-August, gross borrowings accounted for 89 percent of the government’s total planned borrowings of ₱2.55 trillion for the year.

Gross domestic debt swelled to ₱1.84 trillion as of end-August, ₱189 billion or 11.5 percent higher than last year’s gross loans from local sources at ₱1.65 trillion. It accounted for 81.1 percent of the total borrowings during the eight-month period, exceeding the government’s target share of 80 percent.

Notably, the government issued a total of ₱425.6 billion in retail treasury bonds (RTBs) in August, compared to ₱584 billion a year ago. It can be recalled that there was zero issuance of such a scale until August.

The jumbo issuance of these bonds drove up borrowings through the sale of other government securities to domestic lenders, reversing a slight decline seen in the previous months and pushing sales higher by double digits.

A total of ₱941.8 billion was raised through sales of fixed-rate treasury bonds (T-bonds) this year, 4.2 percent higher than the ₱904.2 billion issued a year earlier. The government also increased its borrowings via short-dated treasury bills (T-bills) by 6.7 percent to ₱172.5 billion from ₱161.7 billion in the previous year.

Unchanged from the end-July record, the government issued fixed-rate treasury notes (FXTNs) worth ₱300 billion this year. There was no sale of these debt notes last year.

Foreign borrowings increased by 50.9 percent to ₱426.2 billion from January to August, compared to ₱282.5 billion in the same period a year earlier.

Loans sourced from foreign investors accounted for 18.8 percent of total borrowings for the eight-month period, falling short of the foreign debt’s target share of 20 percent.

This year, the government is targeting to secure 20 percent of its financing from foreign sources and 80 percent from domestic sources, resulting in an 80:20 borrowing mix.

As of end-August, the government had raised ₱171.3 billion worth of program loans, 70.5 percent higher than the ₱100.5 billion a year ago. Unchanged from the end-July figure, the government also increased the global bonds it settled by 66.7 percent to ₱192 billion from ₱115.2 billion.

On the other hand, loans to finance government projects were reduced by 5.6 percent to ₱63 billion from ₱66.7 billion in the previous year.

It can be recalled that the Marcos administration’s gross borrowings surged to ₱2.56 trillion in 2024, a 16.9 percent increase from ₱2.19 trillion in the previous year, driven by a sharp rise in both domestic and foreign debt.

Last year’s total borrowings exceeded the administration’s borrowing plan by ₱100 billion. It was 4.07 percent higher than the programmed ₱2.46 trillion for the year.

Due to a faster increase in spending than earnings, the national government’s fiscal deficit widened by 24.7 percent to ₱869.2 billion during the eight-month period, from ₱697 billion in the earlier year.

Still, the year-to-date fiscal deficit remains manageable, clocking in “well within the ₱1.56 trillion revised full-year program for fiscal year (FY) 2025,” according to the BTr. It also accounted for only 55.7 percent of the target.