Debt payments reach P620 B in September

MANILA, Philippines — The national government spent P620.54 billion to settle its debt from both domestic and foreign lenders in the first nine months of the year, the Bureau of the Treasury (BTr) reported.

According to the latest cash operations report of the BTr, the national government’s debt payments from January to September rose 6.46 percent to P620.54 billion from P582.90 billion in the same period last year.

For the month of September alone, debt payments reached P38.59 billion, 21.7 percent higher as compared to the P31.71 posted the same month in 2017.

The government allots a portion of its budget for debt payments to settle obligations on a monthly basis, depending on their maturity.

Treasury data showed that P349.21 billion of the total amount spent to pay debt as of end-September was used to settle amortization or principal payments.

This is 4.58 percent higher than the P333.93 billion in amortization paid in the same nine-month period last year.

Broken down, bulk or P257.01 billion of the total principal payments went to foreign creditors, while the remaining P92.2 billion was paid to domestic lenders.

Meanwhile, the Treasury said the government also settled P271.33 billion in interest payments in the first nine months of the year, almost nine percent up from P248.97 billion in the same period in 2017.

This is, however, P9.7 billion short of the P281 billion programmed interest payments for the period, the BTr said in a separate statement earlier.

January to September interest payments represented 10.9 percent of total expenditures, lower than the 12.4 percent level in 2017. Interest payments as a percentage of total revenues also declined to 12.8 percent from 13.8 percent a year ago.

According to the Treasury, P180.13 billion of the total interest payments as of September went to domestic lenders, while P91.2 billion went to foreign creditors.

Interest payments for September alone increased by 24 percent to P32.68 billion due to coupon payments for retail Treasury bonds issued in December 2017 and June 2018.

Debt payments form part of the government’s expenditures, which grew by 24 percent to P2.49 trillion as of end-September from P2.01 trillion last year.

For the whole year, the national government has allocated P682.46 billion for debt payments. This comprises of P353.41 billion in interest payments, and P329.05 billion in amortization.

This is also slightly higher than the P680.47 billion spent on debt service in 2017.