of national government (NG) Gross borrowing declined by 65% in September, reflecting a slowdown in public expenditure.
The latest data from the Treasury showed that total gross borrowing fell 64.89% to P128.913 billion in September from P367.183 billion in the same month a year earlier.
Month-on-month, gross borrowings declined 74.65% from P508.527 billion in August.
Household borrowing, which accounted for 93.51% of the total, declined 16.98% to P120.548 billion in September from P145.2 billion in the same month last year.
It was composed of P111.848 billion in fixed-rate treasury bonds (T-bonds) and P8.7 billion in treasury bills (T-bills).
External borrowing, consisting mainly of project loans, fell 96.23% to P8.365 billion in September from P221.983 billion in the previous year.
“This (lower gross borrowing) may reflect the lower share of foreign borrowings in the government's total borrowing mix and may also reflect the prudence of some private sector borrowers by reducing US dollar-denominated and other foreign borrowings in view of foreign exchange risks,” Rizal Commercial Banking Corp. chief economist Michael L. Ricafort said in a Viber message.
The peso closed at P58.196 per dollar on September 30, 35.1 centavos lower than its December 27, 2024 close of P57.845.
“The low amount of foreign loans sanctioned reflects caution versus potential foreign exchange (forex) losses that impact the US dollar and other Foreign debt,” Mr. Ricafort said.
John Paolo R., senior research fellow at the Philippine Institute for Development Studies. Rivera said in a Viber message that the lower borrowing reflected slower government spending, particularly on infrastructure, and the government's “deliberate recalibration of the financing strategy” for the fourth quarter.
“While this moderation in borrowing may help ease the immediate pressure on yields and debt service costs, it also raises two caveats such as if the underlying budget deficit remains large or widens further, NG may potentially need to borrow again at lower rates. Favorable terms,” Mr. Rivera said.
The NG's gross borrowings in the January to September period stood at P2.4 trillion, up 4.11% from P2.3 trillion a year earlier. This was 92.11% of the revised P2.6-trillion Financing program for 2025.
Household debt rose 9.16% to P1.96 trillion in the period ended September from P1.795 trillion a year earlier. This represents 92.83% of the P2.04-trillion domestic borrowing program this year.
Broken down, the domestic debt was composed of P1.05 trillion in fixed-rate treasury bonds, P425.61 billion in retail treasury bonds, P300 billion fixed-rate treasury notes and P181.15 billion T-bills.
As of end-September, gross external debt stood at P434.597 billion, down 13.84% from P504.447 billion a year earlier. This represents 89.03% of the P488.174 billion external borrowing program this year.
Broken down, the foreign debt was composed of P191.965 billion in global bonds, P171.307 billion in program loans, and P71.325 billion in project loans.
External borrowing by the end of September was supported by global bond issuance, which raised $3.3 billion or P192 billion at the end of January but settled in February. , Aaron Michael C. Cy
