THE cost of servicing the government’s debt climbed by half in the first seven months of 2026, as principal repayments more than doubled from a year earlier.
Total debt service surged by 55.90 percent to P1.366 trillion as of end-July from P876.164 billion in the same period last year, latest data from the Bureau of the Treasury showed.
The increase was driven primarily by a sharp rise in amortization, or payments toward the principal of the government’s debt, which doubled to P745.818 billion.
Amortization went up by 110.01 percent from P355.124 billion a year ago and accounts for 54.57 percent of the total debt service bill.
The government shelled out P631.042 billion in domestic amortization, which includes payments made through the Bond Sinking Fund. Some P114.776 billion in amortization was for foreign creditors.
Meanwhile, interest payments rose by 19.15 percent year-on-year to P620.865 billion as of end-July from P521.040 billion. This accounts for 45.43 percent of the total debt service for the seven-month period.
The bulk of the interest payments went toward fixed-rate Treasury bonds at P330.651 billion, while P91.059 billion went to retail Treasury bonds and P30.060 billion to Treasury bills. External creditors were also paid P161.299 billion in interest as of end-July.
For July alone, debt service amounted to P139.991 billion, 29.55 percent higher than the P108.055 billion spent a year ago.
Higher interest payments pushed up the debt service bill, increasing by 29.14 percent year-on-year to P137.175 billion from P106.219 billion.
Creditors were likewise paid P2.816 billion in amortization, 53.37 percent higher than last year’s P1.836 billion.
This year, the government allotted P2.045 trillion for debt servicing. About P1.049 trillion will be spent for principal amortization, while P995.610 billion will be for interest payments.
Interest payments alone would account for 15.47 percent, or P1.114 trillion, of next year’s proposed P7.2-trillion national budget.
As of end-July, the national government’s outstanding debt climbed to a new record high of P19.39 trillion, up by 1.70 percent from P19.07 trillion at end-June due to more domestic and external borrowings and a weaker peso.
The debt-to-GDP ratio rose to 66 percent in the second quarter, the highest since 2004, after the economy grew by only 2.3 percent.
By the end of 2027, the outstanding debt is projected to reach P21.479 trillion. Domestic debt is estimated at P14.282 trillion, while foreign obligations are seen to reach P7.197 trillion.