The national government’s debt service ballooned to more than P600 billion in August, driven by a surge in domestic amortization payments that the administration shelled out during the period.
Latest data from the Bureau of the Treasury showed that the government increased its debt payments in August, as it paid P664.72 billion in obligations from P186.22 billion in the same month last year.
About 90.5 percent of the debt service pile consisted of amortization payments at P601.61 billion in August, which was 4.5 times the P133.44 billion in August 2024.
Domestic payments accounted for a significant portion of amortization payments at P597.88 billion, rising by from last year’s P122.03 billion.
On the other hand, external amortization payments for August declined by 67.3 percent to P3.73 billion from P11.4 billion in the same month the previous year.
Amortization spending covers repayment of the loan’s principal, essentially reducing the government’s debt.
Furthermore, the remaining 9.5 percent of the debt service pile in August was allocated to interest payments, amounting to P63.1 billion. This means that the national government had shelled out nearly 20 percent higher than last year’s level of P52.78 billion.
Interest payments cover the government’s borrowing costs, ensuring the timely fulfillment of obligations and maintaining trust with domestic and foreign lenders.
Divided into segments, the government issued P24.85 billion in fixed-rate Treasury bonds (T-bonds), P16.87 billion in retail T-bonds and P4.62 billion in Treasury bills (T-bills) for August.
The Treasury conducts weekly auctions of government securities to raise funds, which are used to support vital public services, infrastructure and development projects that benefit communities in the country.
Short-term T-bills mature in 91, 182, or 364 days, offering quick returns, while long-term T-bonds extend beyond 20 years, ensuring steady funding for government financing needs.
For the eight-month period, the government’s total debt service slipped to P1.54 trillion from P1.55 trillion in the same period last year.
Latest Treasury data showed that the national government’s outstanding debt slightly declined to P17.47 trillion as of the end of August from a record P17.56 trillion as of the end of July.
While the government debt declined, it is P120 billion above the 2025 ceiling of P17.35 trillion.
For the last quarter, the national government will borrow P437 billion through short-term bills and long-term bonds.