Government uses up 61 percent of 2024 borrowing program

MANILA, Philippines — The Marcos administration jacked up its borrowings to P1.57 trillion in the first semester, using up 61 percent already of its crafted financing program for the year.

Data from the Bureau of the Treasury showed that total borrowings in January to June reached P1.57 trillion, 12.88 percent higher than the P1.39 trillion in the same period last year.

This means that as of the first half of the year, the government already used up 61 percent of the borrowing plan it crafted for the year which is at P2.57 trillion.

A little over 80 percent of the borrowings were sourced from local lenders at P1.3 trillion, a 27 percent jump from the P1.02 trillion in end-June last year.

Of that amount, P609.21 billion was from fixed-rate Treasury bonds. This is 11 percent below last year’s P686.15 billion amid lower interest rates for long-term government securities as inflation was in easing mode and amid expectation of monetary policy easing.

It was also in the first semester when the Marcos administration issued retail T-bonds and raised P584.86 billion in February.

The government also borrowed the remaining P109.07 billion from short-term T-bills. In comparison, the Treasury only borrowed P86.58 billion in the same period last year.

In terms of external debt, the Treasury secured P267.41 billion, down by 27 percent, from foreign sources during the first half.

About 43 percent of that was from the dual-tranche dollar and sustainability bonds where the government raised some P115.25 billion as it took advantage of high demand and temporarily easing global interest rates in May.

At the time, the government borrowed $1 billion for its 10-year tenor with a coupon of 5.25 percent.

Its 25-year sustainability bond, on the other hand, fetched an average rate of 5.6 percent and raised another $1 billion.

Further, about 38 percent of the external financing at P100.5 billion was made up of program loans from multilateral institutions. The remaining P51.67 billion was from project loans.

Next year, the Philippines will slightly decrease its borrowing program by a percentage to P2.55 trillion still in favor of domestic creditors.

Sourcing from the domestic market is part of the administration’s prudent debt management strategy and its initiatives to further develop the domestic capital markets.