Gov’t borrowings swelled in Aug. on mammoth bond issue
This year’s mammoth sale of retail government bonds pushed up the Marcos administration’s total borrowings in August, as the state moved into the final stretch of its annual fundraising drive meant to plug its budget hole.
Gross financing nearly tripled from a year earlier to P508.5 billion, according to the latest cash operations report of the Bureau of the Treasury (BTr).
This brought the eight-month borrowings to P2.3 trillion, marking a 17-percent increase. At this point, the Marcos administration is 88 percent done raising its target financing of P2.6 trillion for the year.
Data showed domestic borrowings surged by nearly 200 percent to P498 billion in August.
Most of that came from P425 billion in retail treasury bonds maturing in 2030, with the government tapping e-wallet platform GCash to sell bite-sized debt securities to small investors. The rest were P12.6 billion in net proceeds from weekly offerings of short-dated Treasury bills, and P60 billion in Treasury bonds.
Since January, the Marcos administration has borrowed P1.8 trillion from the domestic market, equivalent to 85 percent of its P2.1-trillion program for 2025.
Meanwhile, external borrowings surged by 48 percent to P10.3 billion in August, driven by a project loan of the same amount that carried concessional rates and favorable repayment terms. This sent the year-to-date foreign financing to P426 billion, up 51 percent year-on-year and accounting for 87 percent of the P488.1 billion goal.
Budget deficit
The government needs to continue borrowing money from lenders to plug a projected budget deficit of P1.6 trillion, equivalent to 5.5 percent of gross domestic product.
Fiscal planners say they will continue to favor onshore borrowing to limit exposure to foreign exchange risks. The Marcos administration has also made clear it is seeking an upgrade to an A-level credit rating, a distinction it hopes to achieve by keeping debt metrics in check while sustaining economic growth.
For the fourth quarter, the government will raise P437 billion in local financing, 36.7 percent smaller than the P690 billion it had planned to raise in the third, as its annual fundraising efforts wind down. The drive is expected to push the debt stock to P17.36 trillion by year’s end.
By the end of 2026, outstanding obligations are projected to reach P19.1 trillion, as the government targets to borrow a total of P2.68 trillion from local and foreign lenders.
