Government settles P1.53 trillion debts as of November

MANILA, Philippines — The government ramped up its debt payments by more than 50 percent as of end-November last year, settling about 99 percent of its programmed obligations for 2023.

Data from the Bureau of the Treasury showed that the government hiked its debt payments by 55 percent to P1.53 trillion in the 11 months to November last year, from P991.06 billion in the same period in 2022.

This means that as of end-November, the government had settled 98.7 percent of its total debt service for 2023, which is at a record P1.55 trillion. This is divided into an 80:20 mix in favor of domestic creditors.

During the period, 63 percent of the debt service was for amortization or the settlement of the principal amount at P967.09 billion. This is 82 percent higher than the P531.8 billion paid in the comparative period the prior year.

As such, the government exceeded by three percent the P941.35 billion worth of principal to comply with the amortization of debts programmed for 2023.

On the other hand, interest payments increased by 23.6 percent to P567.66 billion, equivalent to 93 percent of the expected P610.67 billion spending earmarked for interest payments for 2023.

Spending on amortization goes to returning the loan principal, while interest payments go to complying with interest obligations.

For amortization, the bulk at 88 percent amounting to P854.04 billion was remitted to domestic creditors.

The remaining P113.05 billion principal payments were made to foreign sources.

Meanwhile, close to 70 percent of the interest payments at P392.19 billion were issued to domestic creditors.

Broken down, the government paid the interest for P248.69 billion in fixed-rate Treasury bonds, P124.12 billion in retail T-bonds and P15.28 billion in Treasury bills (T-bills).

The Treasury sells government securities every week to generate funding for public programs and projects.

Short-dated T-bills have tenors of 91, 182 and 364 days while long-term T-bonds have maturities of up to over 20 years.

Aside from payment to local lenders, the government settled P175.47 billion in interest owed to foreign financiers in the 11-month period of 2023.