90 percent of programmed debt payments settled as of Q3

MANILA, Philippines — The Marcos administration jacked up its debt payments to P1.4 trillion as of end-September, settling about 90 percent of its programmed obligation for the year.

Data from the Bureau of the Treasury showed that the government hiked its debt payments by 57 percent in January to September, indicating that as of the end of the third quarter, the government has settled 90.3 percent of its record P1.55-trillion total debt service for 2023, divided into an 80:20 mix in favor of domestic creditors.

During the period, 67 percent of the debt service was for amortization or the settlement of the principal amount at P940.19 billion. This is nearly double the P489.87 billion paid in the comparative period in 2022.

As such, the government has almost returned the entire P941.35 billion worth of principal to comply with the amortization of debts programmed for 2023.

On the other hand, interest payments inched up by 15 percent to P460.12 billion from P399.98 billion in the same nine-month period last year.

This is equivalent to 75 percent of the expected P610.67 billion spending earmarked for interest payments for 2023.

Spending on amortization goes to returning the loan principal, while interest payments go to complying with interest obligations.

For amortization, the bulk at 91 percent amounting to P852 billion was remitted to domestic creditors. The remaining P88.19 billion principal payments were made to foreign sources.

Meanwhile, close to 70 percent of the interest payments at P317.31 billion were issued to domestic creditors.

Broken down, the government paid the interest for P188.3 billion in fixed-rate Treasury bonds (T-bonds), P112.81 billion in retail T-bonds and P12.62 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 payment to local lenders, the government settled P142.81 billion in interest owed to foreign lenders in the nine-month period.

As of end-September, the national debt slightly eased to P14.268 trillion.