To make up for slower, flood-control-corruption-hit public spending in 2025, the national government (NG) is entering 2026 with a sharp increase in planned first-quarter borrowings, rising from ₱437 billion in the last quarter of 2025 to ₱824 billion.

A Dec. 19 memo signed by National Treasurer Sharon P. Almanza detailed the Bureau of the Treasury’s (BTr) borrowing plan for the upcoming quarter, which shows an increase of ₱387 billion, or 88.6 percent, over the current quarter’s borrowing program.

From January to March, the government intends to borrow ₱324 billion in treasury bills (T-bills), 23.7-percent higher than the ₱262 billion it planned to borrow in the fourth quarter of 2025. T-bills will comprise 39.3 percent of the total first-quarter domestic debt offerings.

Meanwhile, treasury bonds (T-bonds), or long-term government debt, will account for the remaining 60.7 percent, with planned borrowings of ₱500 billion. This is ₱325-billion higher than the current quarter’s ₱175 billion, nearly tripling planned T-bond borrowings.

Planned domestic borrowings for the first quarter represent 30.7 percent of the government’s total planned borrowing in 2026 of ₱2.68 trillion.

Reinielle Matt Erece, economist at Oikonomia Advisory and Research Inc., said the government is front-loading “to lock in funds for the planned expenditures of the government early on,” a strategy that helps lessen “uncertainty on rates, especially if financial markets change throughout the course of the year.”

Michael Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC), said the higher borrowing plan is a function of the NG’s catch-up spending “to make up for reduced government spending due to the anomalous flood control infrastructure projects in the latter part of 2025.”

Erece explained that while higher borrowings will inflate the country’s debt stock, strong gross domestic product (GDP) growth and revenue collections can help maintain the country’s credit rating.

“As of the moment, credit rating agencies still have a positive outlook on the country despite headwinds, which keeps lenders confident in the Philippines’ ability to manage debt. However, it is best that positive reforms regarding public spending are quickly enacted to avoid losing our positive credit rating,” Erece said.

Meanwhile, Ricafort said the current quarter’s borrowing plan is lower, especially in December, due to the Christmas holiday season and reduced activity in the latter half of the month.

He added that the higher figure reflects maturing government securities (GS), including at least ₱200 billion in T-bonds due in February that must be repaid.

On Tuesday, Dec. 23, the BTr also issued a memorandum addressed to all GS eligible dealers-primary dealers (GSEDs), stating that the number of competitive bids per participant during BTr auctions has been increased from 10 lines to 20 lines.

Almanza told Manila Bulletin that this move, which will take effect in 2026, comes “in response to the request of our GSEDs to address the various demands of their clients.”

According to Almanza, this shift means the dealers “will be able to serve the demand of their clients better.”

Next year’s borrowing mix will be 77:23, meaning 77 percent of debt will be sourced domestically, while 23 percent will come from external sources. This marks a shift from this year’s 81:19 borrowing mix.