The government will borrow an estimated amount of P1.16 trillion to fund the deficit for the 2023 national budget, Finance Secretary Benjamin Diokno said on Friday.

"The total revenue collection by 2023 is 3.6 trillion (pesos). The projected expenditures is 5.1 trillion (pesos) your honor and there will be a deficit of 1.16 trillion (pesos)," Diokno said during the briefing for the proposed 2023 budget at the House of Representatives.

Diokno said the projected deficit of P1.6 trillion will be funded mostly from domestic sources.

"We will draw the majority of around 75 percent of our financing from domestic sources. This approach will allow us to remain insulated from foreign exchange volatilities due to ongoing global geopolitical risk," he said.

"We have to finance it and the way we will finance it is we will rely heavily on domestic sources so there will be no foreign exchange risk. In fact, 75 percent domestic, 25 percent foreign," he added.

Despite the need for the country to borrow money to fund the 2023 budget deficit, Diokno emphasized the debt of the Philippines is actually declining.

"Our economy will also increase, so as I said the relevant thing is our debt in relation to the size of our economy and that is actually declining," he said.

"Our needs for borrowing will decline significantly because I don't think we will have another pandemic in the future. Number two what is really relevant is debt as percentage of GDP--the size of the economy-- and that has been declining so that is why I showed that our debt to GDP ratio will progressively decline," he added.

Diokno said the government "will ensure debt sustainability over the medium term (fiscal plan)."

"We aim to reduce the deficit, starting at six percent of deficit in 2023 down to three percent in 2028. This will be achieved through improved spending efficiency and alignment of budget priorities that are anchored on the administrations socio-economic priorities," he added.

Diokno said the country's debt to GDP ''is expected to stabilize next year" and will continue to decline starting 2024.

"Our debt to GDP is expected to stabilize next year and decline from 2024 onwards until it reaches less than 60 percent by 2025 and further down to 51.2 percent by 2028," he said.

"Moreover the framework ensures that we remain committed to long term fiscal sustainability while providing adequate fiscal headroom for infrastructure and human capital investments," he added. Robina Asido/DMS