Gov’t spends P285 B to service debt in Jan-May

MANILA, Philippines - The government spent P285.09 billion to service debt in the first five months of the year, down 15.45 percent from P337.19 billion a year ago, the Bureau of Treasury reported over the weekend.

The amount spent in debt servicing continued to be lower compared to the previous year as the government seeks to lengthen the maturity of its financial obligations.

Total principal payment from January to May stood at P146.37 billion, 29 percent lower than the P206.2 billion a year earlier.

Also, the government paid a total of P138.72 billion in interest, covering P92.41 billion in local debt and P46.31 billion in foreign borrowings.

Total interest payment for the period was 5.89 percent higher than the P131 billion recorded a year before.

In May alone, the government paid P29.53 billion in financial obligations, 21 percent lower than last year’s P37.38 billion. Principal payments for May amounted to P12.83 billion, down 39 percent from P21.02 billion in May 2012.

The decline in debt servicing was also due in part to the increase in overall expenditures for the five-month period.

Total disbursements for January to May amounted to P751.213 billion, 12.4 percent higher than last year’s P668.39 billion.

Public infrastructure spending climbed 35.6 percent to P106.4 billion compared with only P77.1 billion a year ago.

Maintenance and other operating expenditures (MOOE) grew 25.1 percent to P120.2 billion, the bulk of which went to social welfare programs under the Department of Social Welfare and Development (DSWD), the Branding Campaign Program under the Department of Tourism (DOT), as well as expenses made to cover the 2013 National and Local Elections.

While disbursements under net lending fell, the decrease showed that the government was no longer covering for losses incurred by government-owned or controlled corporations.

Capital spending increased 26.8 percent to P104.6 billion. More than half of the amount was used to cover the P60 billion in payments made by the DPWH to suppliers/contractors for various public infrastructure projects.

Other contributors to the increase are disbursements made for projects under the Department of Transportation and Communication as well as the construction of farm-to-market roads under the Department of Agriculture.