Gov’t borrowings up 78% in June on wider-than-expected deficit

The Marcos administration’s gross borrowings soared by 78 percent in June, lifting up the total for the first half of the year as the government tried to plug a higher-than-expected budget gap.

The national government raised P264 billion in total financing in June to bridge its fiscal deficit. This was a sharp increase from the P148 billion it borrowed a year ago, according to the latest cash operations report of the Bureau of the Treasury (BTr).

Also, this brought gross borrowings in the first six months to P1.6 trillion—up by 1.3 percent. At this point, the administration already raised 62 percent of its P2.6-trillion borrowing plan for 2025.

Gross borrowings in the first half increased as the government grappled with a P765.5-billion budget deficit. This exceeded its P760-billion ceiling for the period by 0.63 percent, or P4.8 billion.

The breach happened after the Marcos administration missed its revenue target of P2.28 trillion by 0.89 percent, or P20.4 billion. It also underspent by 0.51 percent, or P15.6 billion, compared to its P3.04-trillion disbursement goal.

Broken down, external financing amounted to P96 billion in June, 6.1 times bigger on an annual basis.

Soft loans

Those foreign borrowings were in the form of soft loans from multilateral lenders and development partners. They offer concessional rates and more favorable repayment terms for the borrower.

The BTr said the government secured P10 billion in project loans and P86 billion in program loans during the month. This brought total offshore financing in the January-June period to P402.4 billion, nearly double the previous year’s amount of P267.4 billion.

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Meanwhile, gross domestic borrowings in June grew by 26 percent to P168 billion. That consisted of P39.9 billion raised during the weekly offerings of short-dated Treasury bills, and P128 billion in Treasury bonds.

In the first semester, local financing dropped by 9 percent to P1.2 trillion.

This year, the administration has set a budget deficit cap of P1.6 trillion, or 5.5 percent of gross domestic product.

The Department of Finance had said it would continue to favor onshore sources of debt to mitigate any foreign exchange risks from holding too much foreign liabilities.