NG debt payments double to P92 billion in July

MANILA, Philippines — The national government spent P92.46 billion last July to settle its maturing obligations, including their interest, according to the Bureau of the Treasury.

According to the latest data from the Treasury, the national government’s debt payments almost doubled to P92.46 billion in July from the P47.21 billion recorded in the same month last year.

The increase happened due to the net redemption of government securities, particularly of domestically issued debt papers, during the period.

Year-to-date, debt service from January to July this year amounted to P477.71 billion, 3.15 percent up from P463.11 billion in the same period last year.

The government allots a portion of its budget for the settlement of obligations on a monthly basis, depending on their maturity.

Based on Treasury data, P41.5 billion of the total debt payments last July went to principal payments, while the remaining P50.97 billion was used to settle interests.

Amortization, for its part, jumped significantly from the P2.37 billion recorded in the same month in 2018.

The BTr said the bulk or P39.95 billion of the total principal payments went to domestic lenders, while P1.55 billion was paid to foreign creditors.

On the other hand, interest payments last July climbed by 13.66 percent to P50.97 billion from P44.84 billion a year ago.

Of the amount, P30.64 billion was paid for the interest incurred by the government’s domestic debt. Another P20.33 billion was also used to settle interests to foreign lenders.

In an earlier statement, the BTr said interest payments as a percentage of government revenues rose slightly to 12.75 percent in July from 12.73 percent in the same month last year. Likewise, interest payments as a share of expenditures widened to 11.97 percent from 10.89 percent due to lower disbursements this year.

Debt payments form part of the government’s expenditures.

In 2018, the national government settled P775.59 billion in debt, almost 14 percent higher than the P680.47 billion in 2017.

For 2019, the national government is programmed to spend P887.91 billion for debt service, based on the 2019 BESF. The amount is 14.5 percent higher than the actual debt payments made last year.

According to Treasury data, the national government’s gross borrowings in the first seven months already reached P839.75 billion, 66.21 percent up from P505.22 billion in the same period a year ago.