MANILA, Philippines, March 16 ------ The government jacked up its borrowings to P2.56 trillion last year following a double-digit increase in both domestic and external debts, data from the Bureau of the Treasury showed. Total borrowings in 2024 rose by 17 percent to P2.56 trillion from P2.19 trillion in 2023, with the government using up 99.6 percent of the P2.57-trillion borrowing plan it crafted for the year.
The bulk of the total borrowings at 75 percent worth P1.92 trillion came from local lenders, which jumped by 18 percent from P1.63 trillion in 2023. Broken down, P1.11 trillion was secured through fixed-rate Treasury bonds. Another P584.86 billion was borrowed via retail Treasury bonds following the issuance in February. At the same time, the government borrowed P224.28 billion in T-bills. Similarly, financing from foreign sources spiked by 15 percent to P641.17 billion from P559.04 billion because of more loans for state programs.
The government traced the largest share of its external financing from multilateral institutions via program loans at P271.34 billion and another P113.59 billion made up of project loans. The administration likewise borrowed through two rounds of dollar bond issuance yielding P256.34 billion. In May, the government raised some P115.25 billion from its 10-year and 25-year offers, with coupon rates at 5.25 percent and 5.6 percent, respectively.
A bigger P141 billion was borrowed in September from a triple-tranche global bond issuance. The country secured $500 million for its 5.5-year tranche with a 4.375-percent yield while it borrowed $1.1 billion for its 10.5-year tenor with a coupon of 4.75 percent. Its 25-year sustainability bond, on the other hand, fetched an average rate of 5.175 percent and raised another $900 million. Last year’s borrowings contributed to the ballooning level of national debt, which climbed to P16.05 trillion at the end of 2024.
Latest data from the Treasury show that debt is still climbing to new highs, amounting to P16.31 trillion as of January. For 2025, the government has lined up a financing program of P2.55 trillion, with 80 percent of the amount to be obtained from local lenders. Such a strategy aims to mitigate foreign exchange risks, take advantage of liquidity in the country’s financial system and support the development of the local debt and capital markets.
The government is also receiving P236.11 billion in program loans, P197.75 billion in other inflows and P73.55 billion in project loans. This should bloat the country’s debt pile to an all-time high of P17.35 trillion by the end of the year. Over two-thirds of the obligations will be owed locally at P11.98 trillion. When measured against the gross domestic product, the country’s outstanding debt stood at 60.7 percent in 2024, still above the fiscally responsible threshold of 60 percent.
The government borrows capital from domestic and foreign sources to fund infrastructure rollout and service delivery that can no longer be covered by its own revenue.
Source: philstar.com
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