No change in borrowing plan for now – DOF chief

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March 25, 2026 | 12:00am

Amid Middle East crisis

MANILA, Philippines — The government’s borrowing plan and financing mix this year remain intact for now, although analysts said relying more on domestic sources would be safer amid the Middle East crisis.

“No changes for now,” Finance Secretary Frederick Go told The STAR in a text message when asked if the government would adjust its financing program and mix.

In 2026, the government plans to borrow P2.682 trillion, of which 77 percent will be sourced locally while the remaining 23 percent will come from foreign sources.

When revenue collections fall short, the government turns to local and foreign lenders to bridge the gap and keep programs funded.

Philippine Institute for Development Studies senior research fellow John Paolo Rivera said the government may need to tilt slightly toward domestic borrowing to reduce foreign exchange risk and avoid locking in costly offshore debt.

“My view is that the current mix is still broadly defensible, but it should not be treated as fixed,” he said in a Viber message.

He noted that if the crisis drags on, a modest bias toward local funding would help limit exposure at a time when both the peso and oil prices are under pressure.

The peso closed at a fresh record low of 60.30 versus the dollar on March 23, extending its slide deeper past the 60 level.

However, Rivera cautioned that leaning too heavily on domestic markets could crowd out private credit or drive local yields higher.

“The goal should be measured adjustment, not abrupt rebalancing,” he said.

For his part, GlobalSource Partners country analyst Diwa Guinigundo said the government would be safer relying more on domestic funding sources.

He explained that if the government sticks to its borrowing plan and financing mix, it can proceed as scheduled. But in a worst-case scenario, resources may have to be reallocated to support subsidies for transport and agriculture.

“This could be tricky because then the government will be depriving other key sectors from using precious public resources,” Guinigundo said.

“Notwithstanding the possibility of higher interest rates this year, the government – if it were to fund its mitigation measures this year – it will have to somehow adjust upward its planned borrowing even as it is necessary to rationalize public expenditure, too,” he added.

At the same time, he urged the government to factor in the potential P136 billion in forgone revenues when considering adjustments to the borrowing program.

“NG (national government) should definitely consider that. Where does it get the forgone revenues, unless it also tightens its belt and reduces spending on other areas and sectors,” Guinigundo said in a Viber message.

The Department of Finance earlier estimated that President Marcos’ special power to suspend fuel excise tax could result in P136 billion in lost revenues if it halts taxes from May to December 2026.

The Marcos administration’s gross borrowings rose by 3.5 percent to P2.65 trillion in 2025 amid higher domestic borrowings, data from the Bureau of the Treasury (BTr) showed. It also exceeded its P2.6-trillion borrowing plan last year.

In 2025, domestic lenders accounted for nearly 80 percent of total borrowings, which surged by 10 percent to P2.11 trillion.