THE NATIONAL Government’s (NG) gross borrowing slumped in May, driven by a decline in foreign loans, the Bureau of the Treasury (BTr) said.
Gross borrowing dropped 25.85% to P192.31 billion in May.
Month on month, gross borrowing declined 50.7%.
Gross external borrowing slumped 95.1% year on year to P6.25 billion in May, with foreign borrowing declining from the high year-earlier base. Last year’s tally reflected the government’s P115.247-billion global bond issue.
Gross domestic borrowing surged 41.25% year on year to P186.06 billion in May.
This total included P159.76 billion in fixed-rate Treasury bonds and P26.3 billion in Treasury bills.
Domestic debt accounted for 96.75% of all gross borrowing.
Oikonomia Advisory and Research, Inc. economist Reinielle Matt M. Erece said a global bond offering in February and large demand for government securities dampened borrowing requirements.
The BTr raised $3.3 billion from dollar bonds and euro-denominated sustainability bonds in late January. The bonds were settled in February.
NG gross borrowing also slipped 6.67% to P1.33 trillion in the first five months of the year, as both domestic and external borrowing declined.
Gross external debt slumped 21.54% to P305.94 billion during the period, consisting of P191.97 billion in global bonds, P85.2 billion in program loans and P28.77 billion in new project loans.
Domestic gross borrowing fell 12.74% year on year to P1.02 trillion during the five months.
This consisted of P629.16 billion in fixed-rate Treasury bonds, P300-billion fixed rate Treasury Notes and P92.41 billion in Treasury bills.
Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., attributed the decline in gross borrowing in the first quarter and in June to fewer maturing government securities compared to a year earlier.
He noted the narrower fiscal deficit during some months, along with surpluses of P68.36 billion in January and P67.3 billion in April, which likely reduced the need for additional borrowing.
“Though offset by the $3.3-billion global bond issuance in the latter part of January 2025 that almost completed the NG’s $3.5- billion commercial borrowing program for 2025 and the P300-billion 10-year Treasury note issuance in April 2025, among other NG borrowings frontloaded amid volatility in the US/global financial markets due to Trump’s higher tariffs,” he said.
In the coming months, Mr. Ricafort said he expects more NG borrowing in the face of large maturing Treasury bonds in August and September.
The Budget deficit declined to P145.2 billion in May as increased revenue collection was accompanied by a slowdown in spending due to the election ban. This broadened the fiscal gap by 29.41% to P523.9 billion in the first five months.
Meanwhile, Mr. Erece said the preference for domestic borrowing over external loans will shield the country from external shocks and foreign exchange fluctuations.
On Thursday, the DBCC set a fiscal deficit target of P1.56 trillion or 5.5% of gross domestic product this year, from 5.3% previously.
This year’s financing program has been set at P2.545 trillion, with 80% coming from domestic lenders and 20% from foreign sources.
The DBM said it will release the new Budget of Expenditures and Sources of Financing in the next two weeks. — Aubrey Rose A. Inosante
