National government debt payments reach P558 billion in 9 months

MANILA, Philippines —The government has spent P558.22 billion to settle its debt, including both interest payments and amortization, in the first nine months, according to the Bureau of the Treasury (BTr).

According to the latest data from the BTr, the latest figure was 10 percent lower than the P620.54 billion recorded in the same period last year due to the double-digit decline in principal settlements, which outpaced the growth in interest payments.

For September alone, however, the government’s debt service rose by 26.77 percent to P48.92 billion from P38.59 billion in the same month 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, P264.48 billion of the total debt payments in the first nine months came in the form of principal payments, which was 24.26 percent lower than the P349.21 billion posted in the same period of 2018.

Further broken down, P145.9 billion of the total amortizations went to domestic lenders, while the remaining P118.58 billion was paid to foreign creditors.

On the other hand, the BTr said interest payments during the nine-month period climbed by 8.26 percent to P293.74 billion from P271.33 billion a year ago. The bulk or P196.71 billion of the amount was paid for domestic debt, while P97.03 billion was allocated for foreign obligations.

In an earlier statement, the BTr said year-to-date interest payments was 7.56 percent below the program, generating savings of P24 billion.

The Treasury said interest payments as a percentage of expenditures went up to 11.18 percent from 10.9 percent last year due to slower expenditure growth. However, for the third quarter, alone, it has started to decline to 10.96 percent from 11.94 percent in the same period last year, as productive spending has started to pick up, the Treasury added.

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. This 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 nine months already reached P917.28 billion, 34.25 percent higher than P683.25 billion in the same period a year ago.

The amount is already equivalent to about 77 percent of the government’s P1.19 trillion borrowing program for the whole of 2019 .

Meanwhile, the government’s outstanding debt as of end-September declined by 0.4 percent to P7.91 trillion from P7.94 trillion in the previous month.