THE National Government’s (NG) gross borrowings hit P2.56 trillion in 2024, coming in just under the P2.57 trillion borrowing plan, the Bureau of the Treasury (BTr) said.

The BTr said borrowing in 2024 rose 16.93%.

Gross domestic debt increased to P1.92 trillion last year, up 17.69%, accounting for 75% of borrowing in 2024.

The BTr was expected to borrow P1.928 trillion from domestic sources last year.

It raised P1.11 trillion from fixed-rate Treasury bonds (T-bonds), P584.86 billion from retail T-bonds, and P224.28 billion from Treasury bills (T-bills).

The government did not offer retail onshore dollar bonds and tokenized bonds in 2024, after raising P71.78 billion and P15 billion from these instruments in 2023, respectively.

Gross external debt rose 14.69% to P641.17 billion in 2024, also less than the P642.5-billion target for foreign borrowing.

External debt included P271.34 billion in program loans, P256.24 billion in global bonds and P113.59 billion in project loans.

In August, the government raised $2.5 billion from a triple-tranche, dollar-denominated global bond issue, the second such offering by the Marcos administration.

The first issue raised $3 billion in January 2023.

In December, gross borrowing fell 24% to P69.77 billion.

Domestic borrowing rose 78.06% year on year to P11.02 billion.

The BTr raised P15 billion from fixed-rate T-bonds while T-bills generated P3.99 billion.

On the other hand, external debt dropped 40.21% year on year to P58.76 billion. Borrowing consisted of P40.83 billion worth of new program loans and P17.93 billion in project loans.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said elevated prices and interest rates since 2022 drove up government expenditure over the past three years resulting in higher borrowing.

“Reduced (gross borrowing) by the National Government of about P20 billion could signal a narrower budget deficit as a percentage of GDP or even in terms of the peso amount,” Mr. Ricafort said. 

The NG posted a budget deficit of P1.506 trillion in 2024, narrowing 0.38% year on year.

However, it overshot the P1.48-trillion deficit ceiling set by the Development Budget Coordination Committee.

Mr. Ricafort said this could bring the NG debt share of gross domestic product (GDP) to under the 60% international threshold for developing countries, from 60.7% at the end of 2024.

In an e-mail, Ateneo School of Government Dean and Economics Professor Philip Arnold P. Tuaño said the slight increase in borrowing may have been caused by the NG’s “desire to retire some of its debt given the lower interest rates environment in the past year.”

The Bangko Sentral ng Pilipinas (BSP) slashed borrowing costs by a total of 75 basis points in 2024. 

In its first policy meeting in February, the BSP left the target reverse repurchase rate unchanged at 5.75%.

He also noted that the 11% increase in expenditure lagged the 15% growth in government revenue, which paved the way for a decline in borrowing.

For 2025, Mr. Tuaño expects government spending to be significantly higher due to the midterm elections.

“It could be possible that the government might breach the deficit target,” he said.

The government borrowing plan is P2.55 trillion for 2025, against P2.57 trillion this year, consisting of P2.04 trillion in domestic borrowing and external borrowing of P507.41 billion.

Finance Secretary Ralph G. Recto in January said the Philippines is hoping to raise $3.5 billion in global bonds during the first half of 2025. — Aubrey Rose A. Inosante