Peso volatility won’t alter 2025 borrowing program — BTr

MANILA, Philippines — The Philippine government’s borrowing strategy remains unaffected by the peso’s volatility, with the planned 80-20 borrowing mix between domestic and external sources holding steady for 2025.

Speaking on the sidelines of the 41st ASEAN Social Security Association (ASSA) Meeting, National Treasurer Sharon Almanza said fluctuations in the peso-dollar exchange rate have already been factored into the government’s debt servicing and budget projections.

“When we do projection and budget, both on the debt and the cost of servicing, it’s within the DBCC [Development Budget Coordination Committee] projection,” Almanza said, referencing the economic body’s full-year currency range forecasts.

The peso has faced recent depreciation pressures amid a stronger dollar, driven by heightened uncertainty over US economic policies and Philippine monetary policy.

The local currency depreciated to as low as 59 to $1 last week, matching the all-time low last seen in more than two years. The peso’s struggle against the dollar is expected to persist, with global economic uncertainties continuing to impact the currency.

However, Almanza said the peso volatility aligns with anticipated trends, minimizing the need to recalibrate borrowing plans.

“No, we’re not changing,” she told reporters when asked if the government would adjust its borrowing strategy for next year.

The National Treasurer also said that the government is nearing the completion of its 2024 borrowing program, with only project and program loans remaining to be finalized.

“For the commercial [borrowings], we’re done. All we have left are the auctions, that’s it. We’re almost complete for the year,” she said.

Based on data from the Bureau of the Treasury, total borrowings as of end-September reached P2.3 trillion, 31.4 percent higher than the P1.75 trillion in the same period last year.

This means that as of the end of the third quarter, the government already used up 89.4 percent of the P2.57-trillion borrowing plan it crafted for 2024.

About 78 percent of the borrowings were sourced from local lenders at P1.8 trillion, 34 percent above the P1.34 trillion in end-September last year.

Next year, the Philippines will slightly decrease its borrowing program by a percentage to P2.55 trillion, still in favor of domestic creditors.

Sourcing from the domestic market is part of the administration’s prudent debt management strategy and its initiatives to further develop the domestic capital markets.