THE National Government’s debt service bill jumped by 42.67% to P253.1 billion in the first two months of the year, the Bureau of the Treasury (BTr) reported.
Latest BTr data showed debt service payments in those two months climbed from P177.4 billion a year ago, after the state repaid P33.3 billion in February and P219.8 billion in January.
The bulk or 69% of the total was principal payments, while the rest were used to pay off interest.
Amortization payments totaled P174.9 billion in the two-month period, up 64.7% from a year ago’s P106.2 billion. In January alone, the government made P172.8 billion in amortization payments, but only P2.1 billion in February.
Broken down, P125 billion of principal payments were made to foreign creditors, while P49.9 billion were used to settle some of its maturing local debt.
Interest payments, meanwhile, climbed 9.8% to P78.2 billion during the two-month period from the P71.2 billion recorded a year ago. The government made P47 billion in interest payments in January, and P31.2 billion in February.
For the first two months of 2020, interest paid to external lenders reached P26.8 billion, and P51.4 billion to local lenders.
Interest payments on local debt consisted of P34.9 billion in Treasury bonds, P12.3 billion in retail Treasury bonds and P4.2 billion in Treasury bills.
The two-month debt service bill accounted for 14% of the government’s P1.79-trillion debt repayment plan this year.
The government runs on a budget deficit as it spends more than the revenue it generates to fund programs, such as infrastructure projects, that will drive growth.
It borrows from foreign and local sources to help fund its budget deficit. It aims to raise P3 trillion this year to plug the fiscal gap seen to hit 8.9% of gross domestic product. — B.M. Laforga
