Debt payments reach P889 billion

MANILA, Philippines — The national government spent P888.96 billion in the first 11 months of 2020 to settle its debt from domestic and foreign lenders, according to the Bureau of the Treasury (BTr).

The government’s debt payments from January to November 2020 rose by more than 10 percent compared to the P805.26 billion recorded in the same period in 2019.

The latest figure also surpassed the full-year 2019 debt payment of P842.45 billion.

The year-to-date tally remained higher even as the figure for November shrunk by nearly 88 percent to P26.79 billion from P221.84 billion in November 2019 due to the timing of maturities in November 2019.

The January to November 2020 total was also adjusted downwards after the Treasury borrowed another P540 billion from the Bangko Sentral ng Pilipinas (BSP).

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

According to Treasury data, the bulk or P533.61 billion of the total debt service from January to November 2020 was used to pay amortization, while the remaining P355.08 billion went to interest payments.

Principal payments rose almost 13 percent compared to the P473.51 billion posted in the same period in 2019.

About P398.89 billion of the total amount was paid to domestic lenders, and another P134.73 billion went to foreign creditors.

Interest payments, likewise, increased seven percent to P355.08 billion from P331.75 billion in the previous year, with P255.45 billion going to domestic debtors and P99.63 billion going to foreign lenders.

In an earlier statement, the BTr said interest payments as a percentage of total expenditures reached 9.63 percent in November last year, down from 10.4 percent in the same period in 2019.

Interest payments, as a percentage of revenues, increased to 13.57 percent from last year’s level of 11.46 percent due to lower revenues.

According to the Budget of Expenditures and Sources of Financing, the debt servicing program for 2020 was set at P1.005 trillion. The government has already met 88.5 percent of this program.

The Philippines was   programmed to borrow P3 trillion last year to plug the deficit in its budget, which was expected to widen to 7.6 percent of gross domestic product.

The BTr said gross financing in the first 11 months of 2020 reached P2.96 trillion, which is almost 99 percent of the program.

As of end-November last year, the national government’s outstanding debt also hit P10.13 trillion, 1.1 percent higher than the P10.03 trillion recorded in October 2020.