Gov’t borrowed more locally in Jan, up 5%
Gross borrowings of the Marcos administration grew by 5 percent in January, driven by higher domestic financing as elevated global interest rates and a strong dollar curbed the government’s appetite for foreign debts.
The government had raised P213.14 billion in total financing in the first month of 2025, bigger than the P203.17 billion it borrowed a year ago, according to the latest cash operations report of the Bureau of the Treasury (BTr).
Of that amount, P152.2 billion was sourced locally, up by 8 percent. That amount included P12.2 billion in short-dated debts via Treasury bills while P140 billion was raised via sale of Treasury bonds.
Meanwhile, gross external borrowings had amounted to P60.94 billion in January, inching down by 1 percent.
The amount comprised of concessional loans extended by multilateral agencies like the World Bank and the Asian Development Bank. These institutions lend money to developing economies like the Philippines at much cheaper cost and offer more flexible repayment terms that typically include a grace period.
BTr data showed the government was able to secure cheap foreign financing in the form of project loans amounting to P4.65 billion, and program loans worth P56.29 billion.
Going for ‘A’
For this year, the Marcos administration—which is targeting an “A” credit rating within its term—has set a fiscal deficit ceiling of P1.537 trillion, which is equivalent to 5.3 percent of gross domestic product.
To bridge the fiscal gap, the government planned to borrow P2.55 trillion from creditors at home and abroad. This, in turn, was expected to push the state’s outstanding debt to P17.35 trillion by the end of 2025.
Amid a shallow easing cycle in the United States that’s powering up the greenback, the Marcos administration had decided to front-load its foreign borrowings for this year, having raised a total of $3.25 billion during its sale of US dollar and euro-denominated bonds in late January.
Finance Secretary Ralph Recto earlier said that the plan for this year was to borrow more domestically, noting that there was still excess liquidity in the domestic economy looking for viable investment outlets.
