After the borrowing overshoot in the first quarter, the Marcos administration continued stepping on the brakes in the months that followed until May, bringing gross debt to ₱1.24 trillion in the first five months of 2026, lower than the ₱1.33 trillion recorded in the same period last year.

While the government exceeded its first-quarter target due to heavy front-loading in February, the pace of borrowing slowed in the following months, with May recording the lowest monthly financing so far this year at ₱108 billion, the latest Bureau of the Treasury (BTr) data showed.

This five-month cumulative total was driven by continued borrowing from domestic lenders, though the volume declined year-on-year. Domestic gross debt as of end-May stood at ₱933.7 billion, 8.6 percent lower than the ₱1.02 trillion raised during the same period in 2025.

Recall that the borrowing spree from domestic lenders peaked in February, when the government raised ₱468.2 billion in a single month—more than triple the ₱140.8 billion borrowed in February 2025.

Meanwhile, domestic borrowing stood at ₱80.3 billion in May, a continuation of the moderation seen in April, when ₱122.3 billion was raised. The state borrowed far less over the two-month period than the ₱570.8 billion it raised in April and May 2025, which included a ₱300-billion issuance of fixed-rate treasury notes.

Of the five-month domestic total, ₱858.5 billion was raised through fixed-rate treasury bonds (T-bonds), 36 percent higher than the ₱629.2 billion raised through the same instrument in the same period a year ago.

Meanwhile, borrowings through short-dated treasury bills (T-bills) for the period declined to ₱75.2 billion, down from ₱92.4 billion a year ago.

As a result, domestic debt accounted for 75.2 percent of five-month gross borrowings. This remains slightly below the government’s 77-percent domestic borrowing mix target.

Meanwhile, gross foreign debt for the first five months totaled ₱308.2 billion, a modest increase from the ₱305.9 billion recorded in 2025. External borrowing remained heavily front-loaded in January with the issuance of ₱161.3 billion in multi-tranche global bonds.

While foreign borrowing remained relatively low in May, the period saw a significant rise in project loans, which reached a cumulative ₱52 billion by the end of May. This was more than four-fifths higher than the ₱28.8 billion recorded as of end-May 2025.

Note that the front-loading of debt earlier in the year occurred at a time when markets were beginning to be stirred by uncertainties tied to the flare-up of the Middle East conflict.

For the current quarter, the Marcos administration aims to borrow ₱784 billion as it ramps up its fundraising efforts. The domestic borrowing plan for the period accounts for nearly 30 percent of the government’s ₱2.68-trillion annual financing requirement.

This June, the government concluded its offshore borrowing after completing its external borrowing program with a $2.5-billion triple-tranche offering of United States (US) dollar-denominated global bonds, aimed at boosting the nation’s coffers to help fund its ₱6.793-trillion national budget for fiscal year (FY) 2026.

Meanwhile, the government’s borrowing scheme would concentrate on domestic capital markets for the upcoming quarter as the administration shifts toward short-term debt instruments amid volatile borrowing conditions.

According to the BTr, the government is seeking to raise ₱1.12 trillion from the domestic market during the July-to-September period, a 43-percent surge quarter-on-quarter.