MANILA, Philippines — The government jacked up its debt service by almost three times to P189 billion in August, with the bulk going to amortization to domestic lenders.
Data from the Bureau of the Treasury showed that the government increased its debt payments by 177 percent to P189.03 billion in August from only P68.3 billion in the same month last year.
About 77 percent of the debt service was for amortization or the settlement of the principal amount at P146.36 billion.
This is a roughly four-fold increase from the P37.52 billion paid in the comparative period a year ago.
On the other hand, interest payments went up by 39 percent to P42.67 billion from P30.77 billion in August 2022.
Spending on amortization goes to returning the loan principal, while interest payments go to complying with interest obligations.
For amortization, the bulk, at 97 percent amounting to P141.62 billion, was remitted to domestic creditors.
The remaining P4.74 billion in principal payments were made to foreign sources.
Meanwhile, close to 70 percent of the interest payments at P29.54 billion were issued to domestic creditors.
Broken down, the government paid interest for P17.85 billion in fixed-rate Treasury bonds (T-bonds), P8.88 billion in retail T-bonds and P2.76 billion in Treasury bills (T-bills).
The Treasury sells government securities every week to generate funding for public programs and projects. Short-dated T-bills have tenors of 91 days, 182 days and 364 days while long-term T-bonds have maturities of up to over 20 years.
Aside from payments to local lenders, the government settled P13.13 billion in interest owed to foreign financiers in August.
For the eight-month period, debt payments surged by 70 percent to P1.16 trillion from P682.85 billion in January to August 2022.
The eight-month amortization payment at P772.64 billion is more than double the P342.77 billion in the comparative period.