THE national government’s gross borrowings fell to P745.142 billion year-on-year in the first quarter, as domestic debt dropped even as external liabilities more than doubled, according to the Bureau of the Treasury (BTr).
Latest data from the BTr showed gross borrowings declined by 30.55 percent to P745.142 billion in the first quarter from P1.073 trillion during the same period a year ago.
The current financing level accounts for 29.27 percent of this year’s borrowing program worth P2.545 trillion.
Broken down, 60.49 percent or P450.800 billion of the government’s borrowings were sourced locally.
Domestic borrowings saw a 52.87-percent drop in the first quarter compared to the P956.581 billion recorded in the same quarter last year.
Meanwhile, the remaining 39.51 percent in external borrowings more than doubled to P294.342 billion in the first three months of the year.
This is higher by 151.02 percent year-on-year from P117.257 billion.
For March alone, total gross borrowings amounted to P192.450 billion, down by 7.14 percent from P207.265 billion in the same month last year.
Domestic borrowings are slightly higher at P157.800 billion in March 2025 from P156.395 billion in March 2024.
Bulk of domestic borrowings, or P132.4 billion, was raised through fixed-rate Treasury bonds, while P25.4 billion came from the sale of Treasury bills.
External borrowings in March, meanwhile, decreased by 31.88 percent year-on-year to P34.650 billion from P50.870 billion.
Of the amount, P28.911 billion was brought about by program loans, while project loans added P5.738 billion to the government’s external borrowings for the month.
Ateneo de Manila University economist Leonardo A. Lanzona told BusinessMirror the government is borrowing more from foreign lenders as United States bond prices declined as a result of the Trump administration’s proposed tariffs.
“One strategy is to have more foreign currency to exploit the higher bond yields from the increased tariffs and US Federal Reserve tightening, which raises interest rates from these bonds,” Lanzona said.
Rizal Commercial Banking Corporation (RCBC) Chief Economist Michael L. Ricafort said the global bond issuance in February could be part of hedging borrowing amid market volatility due to Trump’s higher import tariffs to front-load some borrowings as a matter of prudence.
While the overall proportion still favors the domestic loans, Lanzona said relative increases or growth in foreign borrowings are rising and may continue to rise.
“If this strategy lowers the debt of the country, then more funds can be available for development,” Lanzona said.
“Of course, this is all speculation and could be means of coping with the uncertainties caused by the proposed US tariffs,” he added.
This year, the government will follow an 80:20 borrowing mix to reduce its exposure to foreign exchange risks.
About P2.037 trillion will be raised domestically while P507.408 billion will come from external sources.
Outstanding debt of the national government reached a new high of P16.632 trillion as of end-February, 9.57 percent higher year-on-year from P15.178 trillion.
