Treasury to Recto: Gov’t needs to borrow ₱2.4 trillion

The government needs to borrow over ₱2 trillion this year, the Bureau of the Treasury told Finance Secretary Ralph Recto in a briefing on Wednesday, Jan. 17.

The Department of Finance (DOF) reported that officer-in-charge National Treasurer Sharon P. Almanza conducted a briefing session for Recto at the Treasury’s office in the Ayuntamiento building in Manila.

At the meeting, Recto received information about the national government’s intention to borrow ₱2.46 trillion, with the majority of this sum to be obtained from the domestic market.

Specifically, 75 percent, or ₱1.84 trillion, is set to be borrowed by the government locally, while the remaining 25 percent, equivalent to ₱615 billion, will be financed by foreign creditors.

“The borrowing mix in favor of domestic sources to mitigate foreign exchange risks and support the development of the local debt market,” the DOF said.

Based on the Medium-term Fiscal Framework (MTFF), the Marcos administration expects that the government’s debt-to-gross domestic product (GDP) ratio will stabilize at 60 percent in 2024.

The debt-to-gdp ratio is a measure that compares a country’s total debt to the size of its economy, serving as an indicator of the government’s ability to repay its debts.

A higher debt-to-gdp ratio suggests a larger debt burden relative to the economy’s size, while a lower ratio indicates a more manageable level of debt.

By the third quarter of 2023, the government’s debt ratio had improved to 60.2 percent from 61 percent in the second quarter.

As of the end of November, the national government’s outstanding debt stood at ₱14.51 trillion.

After the briefing, Almanza toured Recto around the Ayuntamiento building. (Chino Leyco)