NG borrowings drop nearly 40% in March

NATIONAL GOVERNMENT (NG) gross borrowings declined by nearly 40% in March as domestic debt plunged, the Bureau of the Treasury (BTr) said.

Data from the BTr showed that the total gross borrowings fell by 39.4% to P116.66 billion in March from P192.45 billion in the same month in 2025.

Domestic debt accounted for 40% of the total gross borrowings for the month.

In March, the NG’s domestic debt amounted to P46.76 billion, dropping by 70.4% from P157.8 billion in the same month a year earlier. This included the issuance of P55.22 billion in fixed-rate Treasury bonds and a net redemption of P8.47 billion in Treasury bills.

On the other hand, external debt accounted for 60% of the total gross borrowings for the month.

In March, gross external borrowings stood at P69.91 billion, more than double of P34.65 billion in the same month in 2025.

This consisted of program loans amounting to P50.85 billion and project loans worth P19.05 billion. There were no global bonds issued during the month.

Ateneo Center for Economic Research and Development Senior Research Fellow Ser Percival K. Peña-Reyes said the decline in gross borrowings in March was due to external shocks — “risk aversion, capital flight, and energy-related uncertainty linked to the Middle East war.”

The Philippines, a net importer of oil, has borne the brunt of surging oil prices amid the Middle East conflict. The country relies heavily on Middle East crude oil, which accounts for 98% of its imports.

“Gross financing declined in March largely due to frontloading, with the government having raised a significant portion of its funding requirements in January and February, allowing issuance to normalize,” said China Banking Corp. Chief Economist Domini S. Velasquez in a Viber message.

“Elevated amortization also reduced the need for fresh borrowing,” she added.

In the January-to-March period, the NG’s gross borrowings jumped by 34.7% to P1 trillion from P745.14 billion in the same period last year.

This represents 37.4% of the P2.68-trillion gross borrowings program for the year under the Budget of Expenditures and Sources of Financing 2026.

Domestic debt accounted for the bulk or 72.8% of total gross borrowings in the first quarter.

Gross domestic borrowings surged by 62.2% to P731.1 billion in the first three months from P450.8 billion in the same period a year ago. This represents 35.6% of the P2.05-trillion gross domestic borrowings program for the year.

This was composed of P644.77 billion in fixed-rate Treasury bonds and P86.335 billion in Treasury bills.

As of end-March, gross external debt declined by 7.4% to P272.56 billion from P294.34 billion a year ago. This represented 43.5% of the P627.1-billion program for the year.

External borrowings consisted of P161.29 billion in global bonds, P79.78 billion in program loans, and P31.5 billion in project loans.

“A rebound is possible in the coming months, especially as government support measures take effect, but it will likely be gradual and highly dependent on how the geopolitical situation evolves rather than on purely domestic policy actions,” Mr. Peña-Reyes said via Facebook Messenger.

Rising oil prices and dwindling reserves have pushed the government to place the country under a one-year state of energy emergency and suspend excise taxes on kerosene and liquefied petroleum gas.

Authorities have also rolled out subsidies and fuel discounts to the vulnerable sectors to cushion the impact of the conflict. 

Ms. Velasquez said the government’s move to frontload borrowings was “advantageous… as it limited exposure to rising global yields” in March.

“However, the outlook appears more challenging, with conditions likely to be rocky moving forward amid higher interest rates, a more pronounced risk-off environment, and a more hawkish monetary policy backdrop,” she added. — Justine Irish D. Tabile