The Marcos administration reduced its debt payments to P169 billion in March amid a decline in amortization payments. Still, debt service more than doubled in the first quarter, the Bureau of the Treasury (BTr) said.
Latest data from the Treasury showed the government slashed its debt payments in March, settling some P169.09 billion in obligations, down by 7.8 percent from P183.36 billion in the same month last year.
Month-on-month, the debt service bill plunged by 60.7 percent from P430.64 billion in February.
Debt service refers to payments made by the government on domestic and foreign borrowings. Spending on amortization goes to returning the loan principal, while interest payments go to complying with interest obligations.
In March, amortization payments declined by 23.7 percent to P72.71 billion from the recorded P95.24 billion in the previous year.
Almost the entire allocation for principal payments was remitted to foreign sources, while only P128 million was made to domestic creditors.
On the other hand, interest payments inched up by 9.4 percent to P96.38 billion from P88.12 billion. in the comparative period. It comprised 57 percent of the total debt service bill.
Domestic interest payments rose by 24.1 percent to P79.71 billion in March from P64.21 billion a year ago.
This consisted of P47.04 billion for fixed-rate Treasury bonds (T-bonds), P28.23 billion for retail T-bonds and P4.41 billion for Treasury bills.
The Treasury sells government securities every week to generate funding for public programs and projects.
Apart from payment to local lenders, the government settled P16.68 billion in interest owed to foreign financiers in March.
Rizal Commercial Banking Corp. chief economist Michael Ricafort attributed the lower debt service bill largely to lower government securities that matured in March 2026.
This fundamentally reduced debt servicing costs, while complemented by the series of rate cuts by the Bangko Sentral ng Pilipinas and the Federal Reserve that tempered interest payments, he said.
Meanwhile, debt payments more than doubled to P737.41 billion in the first quarter from the P342.02 billion in January to March 2025.
As of end-March, the government has settled 37 percent of its total debt service for 2026, amounting to P2.01 trillion.
The government intends to spend P950 billion for interest payments and return P1.06 trillion worth of principal to comply with the amortization of debts.
The Philippines’ outstanding debt is at a record P18.49 trillion as of end-March due to a weakening peso and issuance of domestic securities.
Ricafort added that the peso breaching a new record low of P61 per dollar might increase debt servicing costs of foreign debt payments.