The Bangko Sentral ng Pilipinasa (BSP) approved $6.29 billion (over ₱350 billion) in proposed foreign borrowings by the Marcos administration in the first quarter of 2025, more than double last year’s figure, as the government frontloaded its debt in a cautious move to navigate volatile global markets and challenges stemming from US protectionist policies.

According to the central bank data, the quarter-one approved foreign debt by the government jumped by $3.42 billion or over 119 percent from $2.87 billion in the same period in 2024.

The approved foreign borrowings, all with medium- to long-term maturities, include $3.33 billion in bond issuances, $1.46 billion in project loans, and $1.50 billion in program loans.

“Proceeds of the bond issuances will be used to fund various budget requirements of the national government,” the central bank said in a statement released Friday, April 25.

These include “socio-economic programs and projects, as well as settlement of maturing financial obligations.”

The BSP explained that the program loans will fund economic and financial initiatives, while the project loans will fund transportation and infrastructure projects.

Under the law, all foreign borrowing proposals by the national government, its agencies, and government financial institutions (GFIs)—including those guaranteed by the state — must first be approved by the BSP’s Monetary Board (MB).

“This is in line with the BSP’s tasks of ensuring that the country’s foreign debt remains manageable,” the central bank said.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said the more than double increase “could be partly due to some frontloading of foreign borrowings.”

Ricafort pointed to the $3.29 billion global or ROP bond issuance by the national government in late January, which is close to the $3.5 billion target set for the year.
These moves, he said, were “a matter of prudence in view of volatile US and global financial markets largely due to Trump’s higher US reciprocal tariffs and other protectionist measures.”

He also noted that the government “also reduced the share of foreign borrowings in its total borrowing mix to reduce foreign exchange risks entailed in foreign debt.”

This year, the government plans to acquire 20 percent of its financing from foreign sources, and 80 percent from domestic sources, thus an 80:20 borrowing mix.

Ricafort also said that the increase was also due to the larger amount of maturing foreign debt and the need to fund the government’s wider budget deficit, driven by higher debt servicing costs over the past three years.

Last year, the government exceeded its fiscal deficit ceiling of ₱1.48 trillion when it reached ₱1.51 trillion, 5.7 percent of the country’s gross domestic product (GDP).

For this year, the Marcos administration is increasing its budget deficit to ₱1.54 trillion, 5.3 percent of GDP. In terms of amount, this figure would make the widest deficit in three years, if achieved.

The drop in the US interest rates since late last year, along with potential further cuts in the coming months or years, is expected to ease debt servicing costs moving forward, he said.