Gross borrowings rise to P2.65 trillion in 2025

By Justine Irish D. Tabile, Senior Reporter

THE National Government’s NG) gross borrowings rose by 3.48% to P2.65 trillion in 2025 as domestic debt went up amid increased issuances of securities, the Bureau of the Treasury (BTr) reported.

Treasury data showed that gross borrowings rose from the P2.56 trillion recorded in 2024.

This was also slightly above the P2.6-trillion gross borrowing program for 2025, based on the 2026 Budget of Expenditures and Sources of Financing (BESF) document.

John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said that the increase in borrowings could be attributed to NG’s need to finance its budget deficit and fund priority spending.

“Increases in borrowings occur when NG issues new domestic securities or taps external financing to meet its financing requirements for the year,” he said in a Viber message.

“Another factor could be timing and frontloading of borrowings. NG sometimes raises funds early in the year to secure favorable interest rates or build a liquidity buffer ahead of potential global financial volatility.”

The Philippines’ budget deficit widened by 4.68% to P1.58 trillion in 2025, exceeding the P1.56-trillion ceiling set by the Development Budget Coordination Committee for the year.

Domestic borrowings, which made up the bulk or almost 80% of the total, rose by 9.3% year on year to P2.11 trillion in 2025 from P1.92 trillion in 2024. This matched the domestic borrowing program for the year.

This was composed of P1.23 trillion in fixed-rate Treasury bonds (T-bonds), P425.61 billion in retail Treasury bonds sold in August last year, P300 billion in fixed-rate Treasury notes auctioned off in April last year, and a net P156.3 billion in Treasury bills (T-bills).

On the other hand, gross external borrowings dropped by 15.3% to P543.24 billion in 2025 from P641.17 billion in the prior year. However, this was higher than the P488.174-billion foreign borrowing program in the BESF.

This consisted of program loans worth P213.08 billion, global bonds worth P191.97 billion, and project loans worth P138.2 billion.

In January 2025, the NG raised $3.3 billion from the sale of 10-year and 25-year fixed-rate global bonds and seven-year euro sustainability bonds, which were issued in February.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said the lower external borrowings last year reflect the government’s preference for domestic sources to reduce foreign exchange risks.

“A higher US dollar-Philippine peso exchange rate leads to foreign exchange losses in terms of a higher peso equivalent of foreign debts denominated in US dollars or other foreign currencies,” he said in a Viber message.

DECEMBER
Meanwhile, for December alone, NG gross borrowings declined by 17.7% to P57.46 billion from the P69.78 billion seen in the same month in 2024.

The bulk of the borrowings that month were from external sources at P58.36 billion, 0.7% lower than the P58.76 billion seen a year prior.

Broken down, project loans accounted for P46.63 billion, and program loans accounted for P11.73 billion.

Meanwhile, domestic gross borrowings amounted to -P900 million in December. This was down from the P11.015 billion seen in the same month in 2024 and the P78 billion seen in November 2025.

The decline was mainly due to the negative net issuance of T-bills worth -P35.9 billion as maturities offset gross issuances. Meanwhile, fixed-rate T-bonds totaled P35 billion.

Mr. Ricafort said the negative figure for December reflected the reduced number of T-bill and T-bond auctions amid the holidays. The BTr held just three T-bill offerings and one T-bond auction that month versus its usual weekly schedule.

“For the coming months, NG borrowings would be a function of future budget deficits that need to be financed by additional borrowings; geopolitical risks, especially in Iran, which could lead to higher global oil prices; inflation; interest rates; and exchange rate volatility,” he added.