PH Borrowing ₱2.46-T To Fund 2024 Budget

The Philippines will borrow P2.46 trillion ($44.24 billion) to fund its projected budget deficit next year, Budget Secretary Amenah F. Pangandaman said on June 24, Friday.

Photo Insert: The amount is on top of the Maharika Investment Fund which is about to be signed by President Marcos.

Of the borrowings, 25% will come from overseas sources and 75% domestically, the Philippine Treasury said.

The Marcos administration plans to secure more borrowings from both local and foreign creditors to bridge its projected fiscal deficit, the Department of Budget and Management (DBM) said.

Pangandaman said that the national government’s borrowing of P2.46 trillion in 2024, represents an increase of 12% from this year's P2.2-trillion program. “There’s a slight increase because of the foreign exchange component,” Pangandaman told reporters in a mobile phone message.

The national government's financing plan for 2024 will be primarily sourced locally, with 75%, or 1.845 trillion, to be borrowed from the domestic market; the balance of P615 billion, or 25% of the total, will be obtained from overseas markets.

According to Pangandaman, next year’s financing program of P2.46 trillion already secured the approval of President Marcos and the Cabinet. For 2024, the Development Budget Coordination Committee (DBCC) pegged the government’s budget deficit ceiling at P1.363 trillion, lower compared with the P1.499-trillion shortfall for 2023.

The DBCC is an interagency body tasked to set the government’s macroeconomic assumptions. As of April, the outstanding debt of the government has risen to P13.911 trillion from P12.763 trillion in the same month last year. The amount also inched up compared with P13.856 trillion last March.

Of the total debt, 68% was domestically borrowed, while the remaining 32% was sourced from overseas lenders. From January to April, borrowings of the government have surpassed the trillion-peso mark, hitting P1.109 trillion. This, however, was still lower compared with P1.183-trillion borrowings in the same period last year.

Despite the increasing debt stock in nominal terms, Finance Secretary Benjamin E. Diokno said the government’s outstanding loan obligations as a share of the country’s economy were on a downward trend.

The quarterly debt-to-gross domestic product (GDP) ratio stood at 61.0% as of end-March 2023, down 2.5 percentage points from 63.5% last year.

However, the end-March debt ratio is still above the 60% international threshold deemed by debt watchers as manageable among emerging markets like the Philippines. This ratio is also a measure used by many debt watchers to assess the creditworthiness of governments.

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