For 2024: Programmed borrowings up by 11 percent to P2.46 Trillion

MANILA, Philippines — The Philippines will raise its borrowing program by more than 10 percent to P2.46 trillion next year, in favor of domestic creditors.

Budget Secretary Amenah Pangandaman said next year’s borrowings would be at P2.46 trillion as the government moves for a timely submission of the 2024 National Expenditure Program (NEP).

National treasurer Rosalia de Leon also confirmed the borrowing program, saying that the mix would be an 80:20 domestic-external funding split.

This means that the government intends to borrow P1.968 trillion from local lenders and source the remaining P492 billion from foreign creditors.

Earlier, De Leon said 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.

With this, next year’s borrowings will be 11.3 percent above the P2.21 trillion programmed for 2023.

It is also two percent slightly above the earlier projection of a P2.418 trillion borrowing.

As of end-April, the government has already used up 50 percent or P1.1 trillion of the P2.21 trillion programmed for the year.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said it is good timing for the government to borrow more next year.

“This is amid the easing trend in inflation and eventually interest rates and borrowing costs especially if the Fed starts cutting rates in 2024,” Ricafort said.

Next year’s budget is at a record P5.768 trillion, up 10 percent, and is equivalent to 21.8 percent of gross domestic product.

However, Pangandaman said government agencies had wanted a total of P5.9 trillion in funding for their programs and projects, but fiscal space constraints prevented the approval of such an amount.

The proposed P5.768 trillion is 97.76 percent of the original P5.9 trillion sought by various government agencies.

Pangandaman said the DBM thoroughly evaluated the proposals and considered several factors such as the agencies’ budget utilization rates in the past years, and the alignment of their programs with the priorities outlined in the budget framework.

“Due to the limited fiscal space, we optimized the allocation of resources by ensuring that the projects that will be budgeted are implementation-ready, and must be delivered and executed on time,” Pangandaman said.

“This entails that the agency proposals considered are clear, comprehensive, and complete in terms of submitted supporting documents such as feasibility studies and annual procurement plans,” she said.

The proposed 2024 budget will be submitted a week after the second State of the Nation Address of President Marcos on July 24.