Debt payments hit P78.17B in January

MANILA, Philippines – Debt settlements hit their highest level in a year in January, following an annual trend when more liabilities fall due at the beginning of the year, data from the Bureau of the Treasury showed.

Payments reached P78.17 billion, 34.07 percent down year-on-year but was the biggest since the P118.57 billion shelled out on that same month.

Broken down, interest payments amounted to P45.59 billion, while their principal counterparts totaled P32.58 billion.

The government borrows from foreign and local markets to finance its budget deficit and pay existing debts. 

As of January, the deficit – the gap between revenues and expenditures – was down to P3.47 billion.

“A big chunk of government debts and interest payments mature in January. That would explain the numbers,” a bond trader at a local bank said in a phone interview last Friday.

Treasury data support this. Even before last year, highest debt payments were recorded in January with P124.64 billion in 2014, P111.73 billion in 2013 and P134.71 billion in 2012.

This year, most interest payments went to domestic debts, while foreign principal debts cornered the bulk of amortization.

Specifically, domestic interest payments reached P23.29 billion, down 11.37 percent. Those made for foreign debts also decreased 11.19 percent to P22.30 billion.

For principal, domestic settlements plummeted 85.36 percent to P9.65 billion. The opposite was recorded for external obligations that surged more than ten-fold to P22.3 billion.