Gov't eyes 72%-28% domestic-foreign borrowing mix for 2027 —DOF

The Marcos administration is eyeing further reducing the government’s exposure to foreign borrowings to shield the sovereign debt pile from foreign exchange fluctuations.

At the Senate committee on finance hearing, Finance Secretary Frederick Go said that “majority” of the planned P3.304 trillion borrowing next year “will be sourced domestically.”

Go said the administration is looking at a 72%-28% borrowing mix, in favor of domestic sources.

“Our 2027 financing strategy prioritizes lower risk domestic sources to secure cost-effective financing, maintain a prudent debt profile, and deepen our local bond market,” the Finance chief said.

For 2027, the Budget and Expenditures and Sources of Financing showed that the government is projecting that the total outstanding debt next year will amount to P21.48 trillion, higher than the projected P19.76-trillion debt level for 2026.

This as gross borrowings of the national government are expected to reach P3.304 trillion, the bulk, or P2.389 trillion, will be sourced locally while the remaining P914.982 billion will come from foreign sources.

Next year’s debt level projection assumed a P62:$1 exchange rate by the end of 2027.

Meanwhile, as of end-June 2026, the national government’s running debt stock already surpassed the P19-trillion mark, amounting to P19.065 trillion, up by P518.98 billion from P18.546 trillion as of end-May and higher than the P17.267 trillion sovereign debt level in end-June 2025.

During the hearing, Go said about 33% of the total debt “is in the form of foreign exchange.”

Senator Imee Marcos asked the economic managers about foreign exchange and credit risk management measures available to the government.

“What the government has been doing is we've been increasing our peso exposure and reducing our foreign exchange exposure. In the past, we might have borrowed 60% in peso, 40% in foreign exchange. Today, our goal is to borrow more of 75 to 80% in peso, and only 20% to 25% in foreign exchange,” Go said.—AOL, GMA News