MANILA, Philippines - Monthly debt payments by the national government reached their lowest level in more than four years in October in what could be a timing issue backed by a prevailing low interest environment.
According to data from the Bureau of the Treasury, debt settlements reached P19.801 billion, 15.52 percent down from last year.
It marked the lowest monthly payment since the P18.223 billion recorded in April 2011.
For the first 10 months, the government already shelled out P479.346 billion for debts, still up 5.89 percent from last year’s P452.696 billion.
The government allots a certain portion of its budget every year to debt payments and settles its obligations on a monthly basis, depending on when they are due.
Debt payments are composed of principal and interest settlements and form part of state expenditures every month.
“This could be on the back of a drop in interest rates and a timing issue. Debt swaps conducted early on could have also borne fruit,” said Nicholas Antonio Mapa, economist at Bank of the Philippine Islands, in a phone interview.
“It’s just one of the fruits of our good fiscal cycle,” he added. Treasury officials could not be reached for comment.
The Aquino administration has been active on managing its liabilities by conducting exercises that exchanged high-yielding and short-dated obligations with low-interest debts with longer maturities.
Low interest debts make settlements cheaper, while longer payment terms postpone debt dues to a later date.
Broken down, data showed interest payments in October totaled P16.144 billion, while their principal counterparts reached P3.657 billion.
The figures were down 3.71 percent and 45.19 percent, respectively, from last year.
For the first 10 months, interest payments already reached P271.895 billion, while principal settlements amounted to P207.451 billion.
The former was down 0.83 percent, while the latter was up 16.19 percent.