THE national government paid P1.227 trillion to settle some of its debt in the first semester, more than half higher than a year earlier, as domestic debt amortization doubled.
Total debt service from January to June jumped by 59.70 percent to P1.227 trillion from P768.109 billion in the same period last year, according to data from the Bureau of the Treasury.
The increase in the debt service bill reflected the higher amortization, or the repayment of loan principal over time, which outpaced interest payments.
First-half amortization surged by 110.31 percent year-on-year to P743.002 billion from P353.288 billion.
Most of the amortization went to domestic lenders at P630.907 billion. The amount is 270.13 percent higher than the P170.457 billion the government paid for domestic amortization during the same six-month period.
Amortization shelled out to foreign financiers declined to P112.095 billion, down by 38.69 percent from P182.831 billion a year ago.
Meanwhile, interest payments, or payments determined by the interest rate of an account, rose by 16.60 percent to P483.690 billion in the first semester from P414.821 billion in the same period last year.
Bulk of the interest payments, or P360.719 billion went to local debt. Domestic interest payments grew by 20.31 percent compared to the previous year’s level of P299.827 billion.
The government spent P242.164 billion for interest payments incurred from fixed-rate Treasury bonds, P87.502 billion for retail Treasury bonds and P25.150 billion for Treasury bills.
The remaining, or P122.971 billion, of interest payments went to foreign obligations. First-half external interest payments increased by 6.94 percent from P114.994 billion a year ago.
For the month of June, the government’s debt payments grew by 18.54 percent year-on-year to P77.219 billion from P65.141 billion.
Interest payments accounted for the bulk of the debt service bill at P62.431 billion, up by 8.73 percent from last year’s P57.420 billion. Amortization, meanwhile, nearly doubled to P14.788 billion from P7.721 billion a year ago.
This comes against the backdrop of the national government’s debt-to-GDP (gross domestic product) ratio rising to a 22-year-high at 66 percent in the second quarter, after the economy grew disappointingly and the debt stock continued to climb. (See: https://businessmirror.com.ph/2026/08/08/debt-to-gdp-ratio-climbs-to-66-in-q2-a-22-year-high/).
The ratio was the highest since 2004, when it stood at 71.6 percent, as the country’s fiscal position has become ‘more constrained,’ said Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion.
‘The economy, which serves as the denominator of the ratio, is expanding more slowly than anticipated, making it more difficult to stabilize debt metrics,’ Asuncion said.
As of end-June, the national government’s outstanding debt was at an all-time high of P19.065 trillion, while GDP expanded by 2.3 percent in the second quarter.
This year, the government has programmed P2.005 trillion in debt service payments, consisting of P1.005 trillion in amortization and P950 billion in interest payments.