Scaling back from foreign debt was more pronounced in February, but the Marcos Jr. administration’s aggressive borrowing from domestic lenders drove the surge in government gross borrowings in the first two months of the year.

According to the latest Bureau of the Treasury (BTr) data, the national government’s (NG) gross borrowings as of end-February reached ₱887 billion, surging by more than two-fifths from the ₱552.7 billion recorded during the same period in 2025.

This aggressive financing was driven by more than a doubling of domestic borrowings, as the administration heavily prioritized local markets in February.

Data from the BTr showed that the cumulative increase of ₱334.3 billion year-on-year reflects a significant front-loading of requirements.

While January was marked by a heavy push into foreign markets, February saw a dramatic shift back to domestic obligations to satisfy the state’s funding needs.

Domestic debt for the January-to-February period reached ₱684.3 billion, more than doubling the ₱293 billion in gross domestic debt seen a year ago.

Borrowings in February alone already reached ₱468.2 billion, surging by more than threefold from ₱140.8 billion in February 2025.

Of the month’s total, ₱412.9 billion came from fixed-rate treasury bonds (T-bonds), more than tripling the ₱130 billion raised from the same instrument in February 2025. Borrowings through short-dated treasury bills (T-bills) for the first two months also climbed to ₱94.8 billion from ₱23 billion.

As a result of this domestic surge, the borrowing mix has realigned with government targets. Domestic debt now accounts for 77.1 percent of total two-month borrowings, hitting the government’s 77-percent domestic financing target.

Meanwhile, gross foreign debt totaled ₱202.7 billion as of end-February, a decrease of more than a fifth from the ₱259.7 billion recorded in the same period in 2025.

While external borrowings dominated January due to the issuance of ₱161.3 billion in multi-tranche global bonds, they slowed significantly in February to a mere ₱10.5 billion. This sharply declined from ₱192 billion the BTr raised from global bonds in February 2025 alone.

Borrowings from multilateral and bilateral financing also saw a decline. As of end-February, program loans fell to ₱28.9 billion from ₱56.3 billion in 2025. Project loans, however, showed a modest increase, reaching ₱12.4 billion compared to ₱11.4 billion in the prior year.

Recall that the government was aiming to borrow ₱824 billion in the first quarter, around two-fifths of which were through T-bills and three-fifths through T-bonds.

For the second quarter, the BTr expects to raise ₱784 billion from domestic lenders, a five-percent decrease from the first quarter’s target. Analysts previously warned that below-target borrowings could persist if Middle East tensions continue to push yields higher.