Philippines Adjusts Borrowing Plan Due to Higher Budget Deficit Ceiling

The Marcos administration is increasing the government’s borrowing plan to fund a higher budget deficit ceiling due to a revised revenue target and external economic challenges. Finance Secretary Ralph Recto stated that the financing program will rise to about P2.6 trillion from the previous target of P2.55 trillion. The Development Budget Coordination Committee raised the budget deficit limit for 2025 to 5.5 percent of GDP from 5.3 percent, following a revenue goal adjustment to P4.52 trillion from P4.64 trillion. The deficit increase is equivalent to P50 billion in additional borrowings.

Analysts at Nomura highlighted the challenges in containing the budget deficit without revenue-boosting reforms. The government is adjusting its fiscal program in response to a weakening growth outlook and global uncertainties, prioritizing infrastructure spending while facing revenue underperformance.

Recent data from the Bureau of the Treasury showed a decrease in government financing raised in May, with total borrowings lower by 6.7 percent in the first five months of the year. External financing dropped significantly, while domestic borrowings increased. The government plans to raise P690 billion in local financing in the third quarter.

According to the source: Inquirer.net.