A steady reliance on local lenders is driving the government’s debt, with overall borrowings growing 4.1 percent to ₱2.4 trillion in the first nine months of the year, bringing it just ₱200 billion shy of the revised ₱2.6 trillion ceiling.

The Bureau of the Treasury (BTr) data showed the nine-month total already accounts for 92.1 percent of the Marco administration’s full-year borrowing plan, rising from ₱2.3 trillion recorded in the same period last year.

At end-September, gross domestic debt swelled to ₱1.96 trillion, 9.2 percent higher than last year’s gross loans from local sources at ₱1.8 trillion. It accounted for 81.8 percent of total borrowings during the nine-month period, exceeding the government’s target share of 80 percent.

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

Notably, the government issued a total of ₱425.6 billion in retail treasury bonds (RTBs) in August, compared to ₱584.9 billion a year ago. It can be recalled that there was zero issuance of such scale until August.

The jumbo issuance of these bonds drove up borrowings through the sale of other government securities to domestic lenders.

A total of ₱1.05 trillion was raised through sales of fixed-rate treasury bonds (T-bonds) this year, 2.9 percent higher than the ₱1.02 trillion issued a year earlier. The government also increased its borrowings via short-dated treasury bills (T-bills) by 3.2 percent to ₱186.9 billion from ₱181.2 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 dropped by 13.8 percent to ₱434.6 billion from January to September, compared to ₱504.4 billion in the same period a year earlier.

Loans sourced from foreign investors accounted for 18.2 percent of total borrowings for the nine-month period, falling short of the foreign debt’s target share of 20 percent.

As of end-September, government borrowing via the sale of global bonds dropped by 25.1 percent to ₱192 billion from ₱256.2 billion a year earlier. Its program loans also inched down by one percent to ₱171.3 billion from ₱173.1 billion a year ago.

Loans to finance government projects were reduced by 5.1 percent to ₱71.3 billion from ₱75.1 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.

The national government’s budget deficit widened by 15.2 percent to ₱1.12 trillion in the first nine months of the year, from ₱970.2 billion in the same period last year, driven by a faster increase in spending than earnings.

Still, the year-to-date fiscal deficit remains well below the ₱1.26 trillion program for the period, according to the BTr. It is expected to remain within the ₱1.56 trillion full-year target by the end of 2025.