The Philippine government is set to borrow P735 billion from the domestic market in the second quarter of the year, signaling a more aggressive borrowing strategy amid hopes for better interest rates.
According to a memorandum issued by the Bureau of the Treasury (BTr), the amount will be raised through a mix of short-term Treasury bills (T-bills) and long-term Treasury bonds (T-bonds) between April and June.
Of the total, P325 billion will come from weekly T-bill auctions, covering 91-, 182-, and 364-day tenors. Another P410 billion will be sourced from T-bonds with maturities ranging from three to 25 years.
This latest borrowing plan is 17 percent higher than the P629 billion raised in the first quarter, reflecting the administration’s need to finance its widening budget deficit through domestic means.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the bigger borrowing requirement is tied to the government’s budget priorities. He also noted that external risks, such as U.S. President Donald Trump’s trade measures, could trigger inflation and impact global interest rate movements.
“If U.S. inflation rises due to tariffs, that could slow down expected rate cuts both in the U.S. and here,” Ricafort explained.
The U.S. Federal Reserve recently kept its policy rates steady but hinted at possible rate cuts later in the year. Meanwhile, all eyes are on the Bangko Sentral ng Pilipinas (BSP), which is expected to announce a policy rate cut during its meeting on April 10. BSP Governor Eli Remolona Jr. earlier said a 25-basis-point reduction is likely.
The government continues to rely on a mix of domestic and external borrowing to bridge its fiscal gap. As of January, the national debt hit a record high of P16.31 trillion, with nearly 68 percent sourced from the local market.
