MANILA, Philippines — The government settled P25.2 billion in debt last October as both interest payments and amortization declined year-on-year, according to the Bureau of the Treasury (BTr).
According to the latest data from the Treasury, the national government’s debt payments dropped by 13.63 to P25.2 billion last October from P29.18 billion in the same month last year.
This brought the government’s debt service to P583.42 billion in the first 10 months, 10.2 percent lower than the P649.72 billion recorded in the same period last year.
It also corresponds to 65.7 percent of the P887.91 billion program for debt settlements this year.
The government allots a portion of its budget for the settlement of obligations on a monthly basis, depending on their maturity.
Based on Treasury data, P20.72 billion of the total debt service in October came in the form of interest payments, while the remaining P4.48 billion was for amortization.
Interest payments, decreased by 13.7 percent compared to P24.02 billion a year ago. The BTr earlier attributed this to the high base effect from last year, as well as the premium from reissued bonds.
About P13.69 billion of the total interest payments went to domestic lenders, while another P7.03 billion was paid to foreign creditors.
Year-to-date, interest settlements rose by 6.47 percent to P314.5 billion, which was driven by new issuances in 2018 and 2019 and coupon payment for the P235.9 billion worth of retail Treasury bonds issued in March this year.
The Treasury said interest payments as a percentage of revenues dropped to 12.14 percent from 12.52 percent last year. As a share of expenditures, it slightly increased to 10.7 percent from 10.56 percent.
Meanwhile, Treasury data showed that principal payments last October also went down by 13.3 percent to P4.48 billion from P5.17 billion in the same month last year.
Of the total amount, P3.91 billion went to external lenders, and P564 million went to domestic creditors.
From January to October, total amortization reached P268.96 billion, 24 percent down from P354.38 billion last year.
Debt payments form part of the government’s expenditures.
In 2018, the national government settled P775.59 billion in debt, almost 14 percent higher than P680.47 billion in 2017.
For 2019, the national government is programmed to spend P887.91 billion for debt service, based on the 2019 BESF. This is 14.5 percent higher than the actual debt payments made last year.
According to Treasury data, the government’s outstanding debt as of end-October 2019 inched down by 0.02 percent to P7.906 trillion from P7.908 trillion in the previous month.