MANILA, Philippines - The government spent P121.66 billion in the first two months of the year to pay its debt, 30.2 percent lower than the P174.35 billion paid in the same period last year, according to the Bureau of the Treasury.
For February alone, government debt payments declined by 67 percent to P20.43 billion.
Of the total, the government spent P49.33 billion for principal payments, down 51.45 percent from P101.6 billion. Principal payment for foreign obligations amounted to P48.62 million or 4.85 percent higher than the 46.37 billion settled a year earlier.
The government paid P712 million to service domestic debt, significantly lower than the previous year’s P55.22 billion.
Total interest payments for the January to February period fell 5.8 percent to P72.33 billion from P76.8 billion. The government paid P44.38 billion and P27.94 billion for interest on domestic loans and foreign obligations, respectively.
Fixed-rate Treasury bonds accounted for the bulk of interest payments with the government shelling out P12.27 billion.
Interest payments for retail T-bonds amounted to P2.4 billion.
Money used to pay for interest on loans comes from the government’s budget.
The Aquino administration has been borrowing more from the domestic market given strong liquidity in the financial system. This is in line with the government’s strategy to trim foreign currency debt, lengthen maturities, and pare down borrowing costs.
The government’s outstanding debt rose 4.5 percent to P5.68 trillion last year. Its share to the country’s gross domestic product (GDP), however, dropped to 49.2 percent from 51.5 percent amid the government’s liability management efforts.