THE government’s debt service bill reached its peak in August, as it more than tripled year-on-year to P664.720 billion, bloated by higher amortization.
Latest data from the Bureau of the Treasury (BTr) showed the government’s debt payments soared by 256.96 percent to P664.720 billion in August this year from P186.218 billion in the same month last year.
Amortization, or principal payments, rose by three and a half times to P601.615 billion in August from P133.437 billion a year ago.
About P597.885 billion of the amortization was settled with domestic creditors, a 389.93-percent surge from a year earlier, while payments to foreign financiers fell by 67.29 percent to P3.730 billion.
Meanwhile, interest payments jumped by 19.56 percent to P63.105 billion in August from P52.781 billion a year ago.
Of the total, P46.377 billion went to local lenders, up by 17.82 percent from P39.361 billion. The remaining P16.728 billion was paid to external backers, a 24.65-percent increase from P13.420 billion.
According to Michael L. Ricafort, chief economist at Rizal Commercial Banking Corporation, the higher debt service in August is due to the large maturity of retail treasury bonds (RTBs) worth P516 billion.
Sept bill even bigger
Ricafort said August’s debt payments would be the peak, but the government could still see its debt service bill become relatively larger next month, as P288 billion of treasury bonds will mature on September 9.
‘After that, no more large government securities maturities for the rest of 2025,’ Ricafort said.
Next year, bond maturing in February and April, amounting to P200 billion each, are expected to push up the government’s debt servicing, Ricafort added.
9-month debt service
From January to September this year, the debt service bill posted a marginal decrease of 0.64 percent to P1.541 trillion from P1.550 trillion recorded in the same period a year ago.
This is equivalent to 75.02 percent of the P2.054 trillion programmed for debt servicing this year.
Of the nine-month period’s debt payments, P956.739 billion was shelled out for amortization, which dipped by 8.09 percent to P956.739 billion from P1.041 trillion in the previous year.
Amortization payments reached P768.520 billion for domestic debt, down by 12.63 percent from P879.652 billion a year ago.
Payments to external creditors rose by 16.84 percent to P188.219 billion from P161.086 billion.
On the other hand, interest payments grew by 14.66 percent to P584.145 billion during the nine-month period from P509.441 billion last year.
The government settled P429.120 billion worth of interest to onshore lenders, up by 18.30 percent year-on-year from P362.721 billion.
Meanwhile, interest owed to foreign creditors inched up by 5.66 percent to P155.025 billion from P146.720 billion.
BTr data showed the outstanding debt of the government reached P17.468 trillion as of the end of August.
While this slightly dipped by 0.5 percent from P17.563 trillion from end-July, this is seen to increase in the coming months due to more borrowings.
The government has raised a total of P2.266 trillion in borrowings as of end-August, out of its P2.6-trillion program for the year.