Japanese ministries and agencies made a record request for ¥122.4 trillion ($822 billion) in spending in the budget for next fiscal year as debt-servicing costs rise while the nation also eyes more outlays for defense.

The government’s initial budget request for the year starting in April tops the ¥117.6 trillion request a year ago, the Finance Ministry said Wednesday. The total includes a record ¥8.8 trillion request by the Defense Ministry as Japan aims to raise its military budget to around 2 percent of gross domestic product by 2027. Also pushing up the sum is ¥32.4 trillion for debt financing needs, the highest on record, reflecting the impact of rising bond yields.

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As the Bank of Japan (BOJ) continues to raise interest rates gradually, the government is seeing a rise in its borrowing costs as it pays to maintain social and other services in an aging society.

Every summer, each Japanese ministry and agency makes an initial request for the upcoming fiscal year’s budget plan, and the various requests are consolidated into the initial budget. The requested amount for the current fiscal year was trimmed in the initial budget to a total of ¥115.2 trillion.